A Limitation of an Audit Is Caused by

question 48

Multiple Choice

A limitation of an audit is caused by

• A)the need for the audit to be conducted within a reasonable period of time and at a reasonable cost.
• B)the nature of audit procedures.
• C)the nature of financial reporting.
• D)all of the above.

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Definitions:

Expense Recognition Principle

The accounting principle that dictates expenses should be recognized in the period in which they are incurred, contributing to the accurate reporting of financial results.

Wages Expense

The total cost incurred by an enterprise for the wages paid to employees, reported on the income statement.

Operating Cycle

The time period between the acquisition of goods for sale and the receipt of cash from customers, measuring the efficiency of a company's operational processes.

Inventory Purchases

Transactions involved in buying goods and materials to be sold or used in the production process by a business.