Which of the following is least likely to be an accurate statement concerning characteristics of an audit?
A. An analysis of inventory turnover can indicate possible obsolescence of inventory.
B. The direction of tests for understatement errors is generally directed from the recorded entry to source documents.
C. Use of a perpetual rather than a periodic inventory system is likely to affect the nature of cutoff errors made at year-end.
D. Characteristics of the double entry bookkeeping system make it possible to test for overstated sales when tests of accounts receivable are being performed.
Answer: B
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