In Order to Further Understand Internal Control,an Auditor May Use

question 71

Multiple Choice

In order to further understand internal control,an auditor may use inquiry methods by:

• A)interviewing key employees to gain further insight into the internal control environment.
• B)observing the safeguarding of assets by checking locked doors and safes.
• C)tracing a transaction from the boundary of the organization through to the final reporting.
• D)documenting thoroughly the internal control through the use of narratives.

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Definitions:

Perfectly Inelastic Demand

A situation in which the demand for a product does not change as the price changes.

Perfectly Elastic Supply

describes a market situation where the quantity supplied can change infinitely in response to any change in price.

Elastic Demand

A situation where the demand for a product significantly changes in response to changes in the product's price.

Total Revenue

The sum of money a company earns from selling goods or providing services over a specified time frame.