If There Is a Risk That Management's Assertion That Recorded

question 53

Multiple Choice

If there is a risk that management's assertion that recorded inventory exists is not valid, the auditor will

• A) spend more time testing for the existence of recorded inventory.
• B) spend less time testing for the existence of recorded inventory.
• C) spend more time testing for the completeness of inventory.
• D) not adjust their audit strategy.

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Definitions:

Maximize Profits

The process of increasing the financial gain a business receives from its operations to the highest possible level.

Corporate Boards

Groups of individuals elected by shareholders to oversee the management and make strategic decisions for a corporation.

Government Intervention

A scenario where the government steps into influence, regulate, or directly control economic, social, or other aspects of daily life, often to correct market failures or promote social welfare.

Organizational Performance

Refers to how well an organization achieves its market objectives and goals.