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:

Truffles

A type of highly valued fungi that grows underground near the roots of certain trees and is considered a delicacy in cooking.

Ascomycota

A phylum of fungi characterized by the formation of spores in a specialized sac-like structure known as an ascus.

Morels

A type of edible wild mushroom known for its honeycomb appearance, found in wooded areas in the spring.

Chytridiomycota

A phylum of fungi known for their motile spores, implicated in global amphibian declines due to a disease they cause.