Which of the Following Procedures Is an Auditor Most Likely

question 6

Multiple Choice

Which of the following procedures is an auditor most likely to perform for year-end accounts receivable confirmations when the auditor did not receive replies to second requests?

• A)Review the cash receipts journal for the month prior to the year-end.
• B)Intensify the study of the internal control system over the revenue cycle.
• C)Increase the assessed level of detection risk for the existence assertion.
• D)Inspect the shipping records documenting the merchandise sold to the debtors.

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Definitions:

Decision Table

A tabular method for representing and analyzing logical relationships between conditions and actions, used in decision-making and systems analysis.

Decision Variable

A variable in optimization or decision-making models whose value is subject to choice within a set of permissible values.

Monte Carlo Simulation

A computational algorithm that relies on repeated random sampling to obtain numerical results, often used in physical and mathematical problems.

Sales Forecasts

Predictive analysis to estimate the amount of product or service a business will sell during a particular period.