After the Auditor Has Completed the Substantive Tests of Balances

question 86

Multiple Choice

After the auditor has completed the substantive tests of balances for the inventory process,he or she determines

• A)whether the balance sheet accounts in the inventory process are prepared in accordance with the applicable financial reporting framework
• B)whether the income statement accounts in the inventory process are prepared in accordance with the applicable financial reporting framework
• C)whether the balance sheet accounts in the inventory process are audited in accordance with the applicable financial reporting framework
• D)whether the income statement accounts in the inventory process are audited in accordance with the applicable financial reporting framework

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Definitions:

Unity of Direction

A management principle suggesting that all parts of an organization should be aligned and moving towards common objectives.

Home Building Company

A business organization that specializes in constructing residential homes for clients.

Complete Autonomy

The state or condition of being entirely independent, with the freedom to make decisions without external control or influence.

Pig Iron

A form of crude iron that is the direct product of smelting iron ore with coke and limestone in a blast furnace.