Henrietta Lombardi Assessed Control Risk to Be Low

question 66

Multiple Choice

Henrietta Lombardi assessed control risk to be low. What is the appropriate audit strategy to adopt?

• A) substantive audit approach
• B) control testing strategy
• C) combined audit strategy
• D) substantive year end testing

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Definitions:

Mark-up

The upcharge on the cost of merchandise to accommodate overhead expenses and profitability.

Retail Price

The total cost at which a product is sold to the end consumer, inclusive of all taxes, shipping, and handling fees.

Operating Expenses

Costs associated with running a day-to-day business operation, such as salaries, rent, and utilities.

Mark-up

An extra charge on top of the cost price for items, aimed at covering both overhead expenses and profits, described in terms of a percentage of the initial cost.