The Auditor Should Consider Which of the Following Factors in Selecting

question 20

Multiple Choice

The auditor should consider which of the following factors in selecting the correct sample size?

• A)More testing will be required for manual controls than automated controls because manual controls are more prone to human error.IT controls that have been tested should continue to be reliable.
• B)The more transactions in a system,the more items need to be tested.
• C)The more assurance we receive from other audit procedures,the more the control is tested.
• D)The less susceptible the control is to management override,the more the control is tested.
• E)The more frequently a control is performed,the more items are tested.More internal control tests are performed for controls that are performed daily than for controls performed monthly.
• F)both A and C
• G)both A and E

---

Definitions:

Batches

Groups of items or goods processed or produced together as a single unit, typically within the same production run or period.

Activity Rates

Rates used in activity-based costing to allocate overhead costs to products or services, based on the amount of activity consumed.

Activity-Based Costing

A technique for determining the true cost of a product by assigning its share of overhead costs based on the specific activities it requires.

Overhead Cost

Indirect costs of running a business that can't be linked to specific products or services but are necessary for the business to operate.