Which of the Following Procedures Is an Auditor Most Likely

question 6

Multiple Choice

Which of the following procedures is an auditor most likely to perform for year-end accounts receivable confirmations when the auditor did not receive replies to second requests?

• A)Review the cash receipts journal for the month prior to the year-end.
• B)Intensify the study of the internal control system over the revenue cycle.
• C)Increase the assessed level of detection risk for the existence assertion.
• D)Inspect the shipping records documenting the merchandise sold to the debtors.

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Definitions:

Product Signal

Indicators or features of a product that communicate its quality, authenticity, or prestige to consumers.

Inertia

The tendency to remain unchanged or idle in one's attitudes, behavior, or decisions due to psychological resistance to change.

Non-compensatory Rule

A decision rule in which an option is rejected if it fails to meet at least one important criterion, regardless of its merits on other criteria.

Clever Hans Effect

The phenomenon where a creature (notably a horse named Clever Hans) appears to be able to perform tasks requiring intelligence, but is actually responding to cues from humans.