Which of the Following Is NOT Correct About the Audit

question 35

Multiple Choice

Which of the following is NOT correct about the audit discussion about the susceptibility of the entity's financial statements to material misstatement?

• A)the discussion must be done during the planning phase
• B)the purpose of the discussion is to allow audit team members gain a better understanding of the potential for misstatement
• C)the team determines the audit tests to mitigate the possibility of misstatements
• D)the discussion must be documented in the work papers

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Definitions:

Monte Carlo Simulation

A computational algorithm that uses repeated random sampling to obtain numerical results, often used to model the probability of different outcomes in a process that cannot easily be predicted due to the intervention of random variables.

Demand During Lead Time

The total customer demand for a product during the period it takes to reorder and receive a new supply.

Random Number Intervals

A sequence or range of numbers generated in such a way that each possible number is equally likely to occur, often used in simulations and statistical sampling.

Single-Channel

Pertaining to systems or processes that have only one path or mode of operation for handling tasks or transactions.