If There Is a Risk That Management's Assertion That Recorded

question 53

Multiple Choice

If there is a risk that management's assertion that recorded inventory exists is not valid, the auditor will

• A) spend more time testing for the existence of recorded inventory.
• B) spend less time testing for the existence of recorded inventory.
• C) spend more time testing for the completeness of inventory.
• D) not adjust their audit strategy.

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Definitions:

Fixed Period

A set length of time during which an event or condition exists or must be completed.

Team Incentives

Rewards or benefits given to a group of employees for achieving specific goals or performance targets.

Performance Measures

Metrics used to assess the efficiency, effectiveness, and quality of an employee's or organization's work.

Payout Formula

A predefined method or equation used to calculate the amount to be disbursed to individuals or entities, often used in financial contexts like investments or insurance.