In describing the cycle approach to segmenting an audit, which of the following statements is not true?
A) All general ledger accounts and journals are included at least once.
B) Some journals and general ledger accounts are included in more than one cycle.
C) The "capital acquisition and repayment" cycle is closely related to the "acquisition of goods and services and payment" cycle.
D) The "inventory and warehousing" cycle may be audited at any time during the engagement since it is unrelated to the other cycles.

Question

Quizplus · Accepted Answer

The statement that "The 'inventory and warehousing' cycle may be audited at any time during the engagement since it is unrelated to the other cycles" is not true. The inventory and warehousing cycle is closely linked to the acquisition of goods and services and payment cycle, and is typically audited in conjunction with that cycle.

In Describing the Cycle Approach to Segmenting an Audit, Which