Which of the Following Statements Is Correct

question 41

Multiple Choice

Which of the following statements is correct?

• A) Tests of account balances can often provide evidence about the continued functioning of controls.
• B) An ineffective entity-level control environment may allow the auditor to limit their tests of controls to enquiry and observation.
• C) Auditors do not need to investigate any control exceptions identified during their testing.
• D) Tests of account balances never provide evidence about the continued functioning of controls.

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Definitions:

Ratio

A measure that compares two quantities by division.

Difference

The quantitative discrepancy or deviation between two values or sets of data.

Two-tail Test

A statistical test that considers both the directions of a possible effect, testing for the possibility of positive or negative deviations from the null hypothesis.

Sample Variances

A measure of the dispersion or variability within a sample data set, which indicates how much the sample elements differ from the sample mean.