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Which of the following is not a method that auditors use to control their exposure to sampling risk during the examination?

In assessing the risk of material misstatement for purchases, an auditor vouches a sample of payments in the check register to the supporting documents. Which assertion would this test of controls most likely support?

An auditor most likely would analyze inventory turnover rates to obtain evidence concerning relevant assertions about which of the following?

Which of the following is the audit team’s primary objective in selecting an attribute sampling selection method?

Vouching a sample of items from the perpetual inventory records to the receiving reports achieves the specific ASB balance sheet assertion of which of the following?

If Christine were evaluated with RI, not at risk of termination, and planned to stay with the firm for at least four more years, which projects would she take? Would that be goal-congruent?

Sheila is the owner of a small firm that produces and sells skin care products. Currently, she only has two products: Smooist and Exfoliotic. With these two products, Sheila has been struggling. She does not understand the problem. Over the last few years, things were going ok, until inflation and tariffs increased. Suddenly, her raw materials became more expensive, her employees started demanding higher salaries, her margins narrowed, and she began incurring losses. This is her last income statement: Sheila has asked you for advice. She is worried about the Smooist product, because it shows a negative margin. She is afraid of increasing prices because competitors have not raised theirs, and she might lose market share. However, she thinks that, since the margin is negative, she might as well drop the product and save the money. Before she makes any decision, she wants you to write an ABC income statement. To do that, she gives you the following information about her overhead costs: She also provides information on the cost drivers and resource consumption for both products. Both products require careful technical supervision and are produced in batches using a mixing machine at high temperatures. Two years ago, when the economy was healthier and demand was strong, they were working at a pace that was very hard to sustain without a substantial investment in additional resources. That year, the machines ran for 5,500 hours, produced 210 batches, and required 5,000 hours of technical supervision.

Calculate the materials’ price variance. 

Which projects would shareholders want to take?

Christine is the divisional manager of a sports equipment company. Her division manufactures and sells tennis rackets. The division has performed poorly over the last two years, with an ROI of only 5%. Headquarters understands that the current economic situation has not helped, but she remains at risk of termination if she does not improve her division’s ROI very soon. To address the problem, she has designed two projects that may help. The following data should allow you to evaluate the projects: