Analytical Procedures Are Used in an Audit Because It Is

question 39

Multiple Choice

Analytical procedures are used in an audit because it is assumed of financial statements that

• A)management fraud can be discovered using such procedures.
• B)it is plausible that no relationship among data exists.
• C)analytical procedures are used as tests of controls.
• D)plausible relationships among data may reasonably be expected to exist and continue.

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Definitions:

Long Run

A period of time in which all factors of production and costs are variable, and firms can adjust all inputs.

Competitive Price-searcher

A market condition where sellers actively set prices and seek to differentiate their products in an effort to attract consumers in a competitive environment.

Economic Losses

Financial losses incurred by businesses or economies, often due to inefficiencies, misallocation of resources, or external factors.

Barriers to Entry

Barriers to entry are obstacles that make it difficult for new competitors to enter a market, including high initial costs, licensing requirements, and strong brand loyalty among consumers.