Which Statement Is Most Correct

question 43

Multiple Choice

Which statement is most correct?

• A) In observing physical inventory, the auditor has a responsibility to both take and supervise the taking of inventory.
• B) In observing physical inventory, the auditor has no responsibility to take or supervise the taking of inventory.
• C) In observing physical inventory, the auditor is only responsible for supervising the taking of inventory.
• D) In observing physical inventory, the auditor is responsible for the taking of inventory.

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Definitions:

Positive Economics

A branch of economics that focuses on objective analysis and the description of how the economy functions, as opposed to normative economics that involves value judgments.

Normative Economics

An area of economics that makes assessments of economic fairness or desired economic outcomes and aims of public policy.

Consequences

The outcomes or effects resulting from a particular action or set of conditions.

Negative Relationship

A relationship between two variables, X and Y, in which a decrease in X is associated with an increase in Y and an increase in X is associated with a decrease in Y.