As the acceptable level of detection risk decreases, an auditor may change the
A. Timing of tests of controls by performing them at an interim date rather than at year-end.
B. Nature of substantive procedures from less effective to more effective procedures.
C. Timing of tests of controls by performing them at several dates rather than at one time.
D. Assessed level of risk of material misstatement to a higher amount.
B. Nature of substantive procedures from less effective to more effective procedures.
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One way to discover intangible factors influencing the other party's behavior is to look for visible evidence to explain their behavior, such as having a new boss. What are two other ways of discovering the other party's intangible factors?
What will be an ideal response?
Assume the indirect method is used to compute net cash flows from operating activities. For this item extracted from the financial statements-Depletion Expense-indicate the effect on net income in arriving at net cash flows from operating activities by choosing one of the following:
A) Add to net income to arrive at net cash flows from operating activities. B) Subtract from net income to arrive at net cash flows from operating activities. C) Not used to adjust net income to calculate net cash flows from operating activities.
The impairment test for an intangible asset with a definite life compares the
a. fair value of the asset to its book value. b. sum of the undiscounted cash flows expected to be generated by the asset to its book value. c. sum of the discounted cash flows expected to be generated by the asset to its fair value. d. sum of the undiscounted cash flows expected to be generated by the asset to its fair value.
Which of the following is the best example of a stalling objection?
A. "Your price is too high for the quality." B. "Frankly, your competitor makes a more efficient refrigeration unit." C. "Sounds good! I'll need to clear it with my boss before I can make a purchase." D. "I think you have a great product, but at this moment we don't need a new security system." E. "You've got to do better than that with the price and financing."