Identify what characteristic can be used to select riskier items.
Based on the same background information as was used for question 1, but assuming that in selecting
which customer balances to detail test you want to expand directed testing by selecting additional items
based on risk and size, reevaluate the mix of directed testing and audit sampling. If you believe it would
be efficient and effective to increase your directed testing, prepare a schedule that includes the following:
While there is no single “correct” answer, one characteristic of risky items may be large balances
of >90 days. For example, those accounts with a balance of >90 days old over $30,000 could be
considered risky.
You might also like to view...
Which of the following is true of strict liability?
A. The essential element for strict product liability is that the product is not defective. B. Courts never hold the retailer liable if the manufacturer is available for suit. C. Most states hold that plaintiffs can recover for purely economic losses under strict liability. D. The application of strict liability varies among states.
You are interested in the effect of increased carbon dioxide versus normal air on the growth of corn plants as well as the effect of green light versus full sunlight on the growth of corn plants. Your plan is to set up your experiment inside a greenhouse where you can control the environment. Which of the following is an aspect of the experiment that should be considered and controlled?
A. All seedlings come from one uniform strain. B. All temperatures and available water remain the same for all plants. C. An increase in carbon dioxide should not result in a substantial decrease of other necessary gases. D. The intensity or brightness of the green light equals the intensity of the full sunlight. E. All of the choices are important considerations.
Preferred stock on which the right to receive dividends is forfeited for any year that the dividends are not declared is referred to as:
A. Cumulative preferred stock. B. Noncumulative preferred stock. C. Callable preferred stock. D. Convertible preferred stock. E. Participating preferred stock.
One significant area where value engineering has produced impressive results is with regard to ______.
a. reducing costs of inputs into a product b. the information technology in product manufacture c. analyzing the market to ensure customers receive value d. reducing the cost of reverse logistics