During the Observation of the Inventory Count, the Auditor Has

question 22

Multiple Choice

During the observation of the inventory count, the auditor has no responsibility to

• A) watch for damaged and obsolete inventory items.
• B) make some test counts of inventory quantities.
• C) supervise the taking of the inventory.
• D) The auditor has responsibility for all of the above.

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Definitions:

Type II Error

A statistical mistake occurring when a test fails to reject a false null hypothesis, incorrectly indicating no effect or difference when one actually exists.

Significance Level

A statistical threshold that determines the probability of rejecting the null hypothesis when it is true, commonly set at 0.05 or 5%.

Type I Error

The incorrect rejection of a true null hypothesis, often referred to as a "false positive" finding in research.

Cohen's D

A measurement of the effect size indicating the standardized difference between two means.