An Auditor May Decide not to Perform Tests of Controls

question 44

Multiple Choice

An auditor may decide not to perform tests of controls related to the control activities within the computer portion of the client's internal control.Which of the following would not be a valid reason for choosing to omit such test?

• A)The controls duplicate operative controls existing elsewhere.
• B)There appear to be major weaknesses that would preclude reliance on the stated procedure.
• C)The time and dollar costs of testing exceed the time and dollar savings in substantive testing if the tests show the controls to be operative.
• D)The controls appear adequate.

Learn the function and purpose of a sinking fund.

Calculate the total amount of payments or costs associated with loans and investments over time.

Understand the principles of compound interest and how it applies to loans and investments.

Calculate the total amount paid over the life of a loan including interest.

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Definitions:

Distribution Density

The measure of the number of distribution points or outlets a product has within a given area.

Few Retail Outlets

A market structure where there are a limited number of places for consumers to make purchases in a given area.

Marketing Channel

Pathways and processes by which products or services flow from the producer or supplier to the consumer, including logistics, distribution, and retailing activities.

Limited Knowledge

The state of having incomplete or inadequate information about a subject or situation.