The Auditor Should Plan the Audit of the Revenue Business

question 5

Multiple Choice

The auditor should plan the audit of the revenue business process with the following presumption

• A)that there is a risk of material misstatement due to fraud relating to revenue recognition.
• B)that professional skepticism is necessary to find misstatements.
• C)that evidence gathering and planning the audit require a questioning mind.
• D)that the general environment or tone in the company may allow management to rationalize committing fraud.

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Definitions:

Economic Prosperity

The state of flourishing, thriving, good fortune, and/or successful social status in terms of wealth, health, and happiness.

Incentives

Forms of motivation that aim to encourage people to perform actions or undertake activities by providing rewards or benefits.

Costs And Benefits

The analysis of a decision by comparing the expenses and disadvantages against the gains and advantages.

Gas Prices

The cost per unit volume of gasoline, a significant indicator of both energy market conditions and economic factors affecting transportation costs.