Enquiry Involves the Auditor

question 36

Multiple Choice

Enquiry involves the auditor:

• A) using questioning skills to determine how the control is completed and whether it appears to have been carried out properly and on a timely basis.
• B) re-performing the control to test its effectiveness.
• C) the auditor observing the actual control being performed.
• D) testing the physical evidence to verify that a control has been performed properly.

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Definitions:

Accrued Loss

A loss that has occurred but has not yet been recorded in the accounts through the normal accounting process, often recognized through adjusting entries.

Major Categories

General classifications used in various contexts, such as financial accounting, to organize items or concepts into distinct groups based on similar characteristics.

Total Inventory

The sum value of all types of inventory a company holds, including raw materials, work-in-progress, and finished goods.

Gross Profit Ratio

A financial metric that shows the portion of sales revenue that exceeds the cost of goods sold, indicating efficiency in production and sales.