The Auditor's Strategy in Performing Test Counts During the Inventory

question 6

Multiple Choice

The auditor's strategy in performing test counts during the inventory observation is to:

• A) test all large-dollar items.
• B) randomly select all test items.
• C) concentrate tests on high dollar items with random selection of other items.
• D) concentrate tests in areas where employees seem to be disregarding the inventory instructions.

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Definitions:

Behavioral Economists

Professionals who study the effects of psychological, cognitive, emotional, cultural, and social factors on the economic decisions of individuals and institutions.

Prone To Errors

Characterized by a higher likelihood or tendency to make mistakes or inaccuracies.

Temptation

An urge or desire to perform an action that may be beneficial in the short term but is generally considered unwise or detrimental to long-term goals.

Behavioral Economists

Economists who study the effects of psychological, cognitive, emotional, cultural, and social factors on the economic decisions of individuals and institutions and the consequences for market prices, returns, and resource allocation.