If auditors conducting attributes sampling found that the entity deviated from a prescribed control in nine of the first 10 items examined, the auditor is most likely to:
A. increase the computed upper deviation rate.
B. decrease the tolerable deviation rate.
C. increase sample size.
D. stop the test and increase control risk.
Answer: D
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If a company purchases $3,200 worth of inventory with terms of 2/10, n/30 on March 3 and pays April 2, then the amount paid to the seller would be
a. $3,136 b. $3,150 c. $3,168 d. $3,200
Who decides whether or no an expert witness is qualified to testify in a specific case?
a. the judge b. the jury c. the attorney who hires the expert d. the opposing attorney during the deposition
The Sarbanes-Oxley Act is intended to provide protection where oversight did not previously exist.
Answer the following statement true (T) or false (F)
The state of Illinois has passed a law requiring that every automobile be inspected at least once a year for pollution control. Anfang Enterprises is considering entering into this type of business. After extensive studies, Joseph Anfang has developed the following set of projected annual data on which to make his decision: Direct service labor $363,000.00 Variable service overhead costs
270,000.00 Fixed service overhead costs 280,000.00 Marketing expenses 120,000.00 General and administrative expenses 170,000.00 Minimum profit 90,000.00 Cost of assets employed 500,000.00 Anfang believes that his company will inspect 100,000 automobiles per year. The company earns an average of 18.75 percent return on its assets. The price to be charged for inspecting each automobile using the return on assets pricing method would be calculated as follows: a. ($913,000.00 ÷ 100,000) + {($913,000.00 ÷ 100,000) ? [($90,000 + $290,000) ÷ $913,000.00]} b. ($1,203,000.00 ÷ 100,000) + [($1,203,000.00 ÷ 100,000) ? ($90,000 ÷ $1,203,000.00)] c. ($1,203,000.00 ÷ 100,000) + [($500,000 ÷ 100,000) ? 0.1875] d. None of these