Which Is Most Likely When the Assessed Level of Control

question 61

Multiple Choice

Which is most likely when the assessed level of control risk increases?

• A)Change from performing substantive procedures at year-end to an interim date.
• B)Perform substantive procedures directed inside the entity rather than tests directed toward parties outside the entity.
• C)Use the maximum number of dual purpose tests.
• D)Use larger sample sizes for substantive procedures.

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Definitions:

Bond Discount

The difference when a bond is sold for less than its face value or par value.

Interest Expense

The cost incurred by an entity for borrowed funds, including the expense on bonds, loans, convertible debt, and lines of credit.

Interest Expense

The cost incurred by an entity for borrowed funds, represented as the interest payments due to lenders.

Amortized

The process of gradually reducing the cost (or value) of an intangible asset through systematic charges to expense over its useful life.