When Using the Cycle Approach to Segmenting the Audit, the Reason

question 37

Multiple Choice

When using the cycle approach to segmenting the audit, the reason for treating capital acquisition and repayment separately from the acquisition of goods and services is that:

• A)the transactions are related to financing a company rather than to its operations.
• B)most capital acquisition and repayment cycle accounts involve few transactions, but each is often highly material and therefore should be audited extensively.
• C)both A and B are correct.
• D)neither A nor B is correct.

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Definitions:

Key Indicators

Critical metrics or variables that are used to measure the performance, health, or progress of a business, project, or process.

IT Infrastructure

The combination of hardware, software, network resources, and services required for the existence, operation, and management of an enterprise IT environment.

Cloud Computing

A model for enabling ubiquitous, convenient, on-demand network access to a shared pool of configurable computing resources.

HRM Audit

A systematic evaluation process of an organization's Human Resources function and its strategies, policies, and practices to identify areas of improvement or compliance.