When Testing for Accuracy, an Auditor Searches for Evidence

question 7

Multiple Choice

When testing for accuracy, an auditor searches for evidence:

• A) to verify that a recorded transaction or event took place and relates to the entity
• B) that all disclosures that should have been included in the financial report have been included
• C) that transactions and events have been recorded at appropriate amounts
• D) to verify that recorded assets are owned by the entity

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Definitions:

Economic Efficiency

The condition in which it is impossible to generate a larger welfare from the existing resources. In other words, the situation in which every resource is optimally allocated to serve each individual in the best way while minimizing waste and inefficiency.

Environmental Regulation

Laws and rules that govern how individuals, companies, and governments interact with the natural environment to minimize harm and ensure sustainable development.

Property Rights

The legal rights to own, use, and dispose of assets, land, or property.

Economic Outcomes

The results or consequences of economic activities, which can affect wealth, resource distribution, and overall economic health.