In Testing Controls Over Invoices, an Auditor Discovers That in 10

question 18

Multiple Choice

In testing controls over invoices, an auditor discovers that in 10% of her statistical sample invoices were sent for full shipments, even if shipping documents suggested partial shipments. In this case, she would likely ________.

• A) increase her sample size to determine the extent of the control weakness
• B) recalculate control risk to determine if there is any effect on the nature, timing, or extent of her year-end procedures
• C) conclude that controls are working at 90% effectiveness and classify control risk as low
• D) consult with her partner to consider launching a fraud investigation

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Definitions:

Incorporating Graphs

The action of including graphical representations of data or information within a document or presentation.

Roman Numerals

A numeral system originating in ancient Rome, using combinations of letters from the Latin alphabet to signify values.

Flowchart

A graphical representation of a process, showing the steps as boxes of various kinds, and their order by connecting them with arrows.

Quantitative Data

Refers to numerical data that can be measured and quantified, often used for statistical analysis to identify patterns or trends.