When an Error or Exception Is Identified During Substantive Testing

question 27

Multiple Choice

When an error or exception is identified during substantive testing, the first response is to:

• A) qualify the audit report.
• B) understand why the error or exception has arisen.
• C) increase the sample size.
• D) report the error or exception to the audit committee.

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Definitions:

Wages

Compensation given to employees for their work, often determined by the hour, day, or by the amount of work completed.

Labor Force

The labor force comprises all the working-age population that is either employed or actively seeking employment.

Discrimination

Unjust or prejudicial treatment of different categories of people, especially on the grounds of race, age, or sex.

Households

Units consisting of one or more people who live in the same dwelling and share meals or living accommodation; considered basic units of consumer behavior.