The most important difference among tests of controls, substantive tests of transactions, and tests of details of balances lies in what the auditor wants to measure. Explain what each type of test attempts to measure
What will be an ideal response?
Tests of controls focus on testing the operating effectiveness of internal controls. In substantive tests of transactions, the auditor is concerned about both the operating effectiveness of internal controls and the monetary correctness of transactions in the accounting system. In tests of details of balances, the concern is determining whether the dollar amount of an account balance is materially misstated.
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If a factory wants to cut its current lot size in half, by what proportion must setup cost change?
A) Setup cost must be cut to one fourth its current value. B) Setup cost must also be cut in half from its current value. C) Setup cost must double from its current value. D) Cannot be determined. E) Setup cost must quadruple from its current value.
Briefly explain what the empirical evidence suggests about financial managers' actions as they relate to the capital structure theory
What will be an ideal response?