How does the use of scenarios differ from sensitivity analysis?

Q: How to compare and contrast probable and estimable contingencies vs. remote contingencies.

A: Contingencies: Contingencies are the incidences   which may  or may not happen  and it depend  on…

Q: Outline the weaknesses of sensitivity analysis

A: Sensitivity analysis uses in capital budgeting for measuring the risk in project. It helps in…

Q: What determines the acceptable level of Detection Risk?

A: Detection Risk:   It is a chance that an auditor will fail to identify any material misstatement…

Q: How do you figure out the balance of control and substantive testing? How does this link into…

A: Substantive testing can be defined as the process of auditing financial statements and obtaining…

Q: When is Attribute sampling used?

A: Attributes sampling is a statistical sampling method used to estimate the rate of control procedure…

Q: What are risk assessments?

A: Risk assessment means identification of risk faced by a business organization that hampers it from…

Q: Difference Between Traceability and Controllability?

A: Following is the answer to the given question

Q: what does measurement focus mean?

A: Accounting: It is the process of recording, classifying, summarizing all transactions of a business…

Q: Sensitivity Analysis Methods

A: Sensitivity analysis is an analysis method that is used to identify how many variations in the input…

Q: What is the relationship between tests of controls and substantive tests?

A: Audit Planning:   Audit planning is the first step in the auditing process. Auditor gathers all the…

Q: What detail would a decision maker require to analyse a dilemma with the expected value? What…

A: Settling on choices is surely the main undertaking of an administrator and it is regularly an…

Q: Describe the Sensitivity Analysis for Mutually Exclusive Alternatives?

A: Sensitivity analysis portrays how various values of an independent factor under a given arrangement…

Q: Why do we need stress testing and scenario analysis?

A: A stress test or scenario analysis is used to determine and analysis the outcome of a financial…

Q: What is performance testing and what are its bottlenecks?

A: It examines financial records, individual transactions, and the processes involved in obtaining and…

Q: uncertainty?

A: Answer - Option D Relevance is where the information is useful and appropriate , predictive or…

Q: What is Non-Sampling Risk?

A: Sampling: It is a procedure used by the auditor to analyze the predetermined number of observations…

Q: What are the two primary factors that are difficult to estimate in sensitivity analysis?

A: Answer: Sensitivity analysis is commonly used in determining the interactions in a system or even a…

Q: What is the risk of assessing Control Risk too low?

A: Definition:   Tests of controls: Tests of controls form the part of audit procedures to be…

Q: What are the characteristics of Substantive Tests?

A: Audit Planning: Audit planning is the first step in the auditing process. Auditor gathers all the…

Q: What are the implications of CVP analysis?

A: The CVP analysis stands for cost volume profit analysis.

Q: Define control risk and detection risk. What is the difference between control risk and detection…

A: Auditing:   In auditing, auditors verify the correctness and fair presentation of financial…

Q: How can sensitivity analysis be incorporated in DCF analysis?

A:

Q: How is the ERC (efficient response coefficient) determined and which role analyst forecasts play in…

A: The earnings response coefficient, or ERC, is a calculated ratio between stock returns and the…

Q: t is “inquiry” and “observation” procedures? Give the strengths and weaknesses of these tests?

A: This method is often used in conjunction with other, more reliable method. For example, an auditor…

Q: How are Sensitivty Analysis and Scenario Analysis different in details?

A: Sensitivity analysis is the evaluation of the impact on the project when there may be a few…

Q: What is Sensitivity Analysis and why is it useful?

A: The sensitivity analysis is utilized to comprehend the impact of a lot of autonomous factors on some…

Q: what are the advantages of using Analytical Procedures as Substantive Tests

A: solution concept Analytical Procedures as Substantive Tests               Analytical procedure means…

Q: Differentiate between sensitivity analysis and scenario analysis.What advantage does scenario…

A: Differentiate between sensitivity analysis and scenario analysis: Scenario analysis involves…

Q: When we perform sensitivity analysis for mutually exclusive alternatives, itmay be more effective to…

A: Net present worth is acknowledged as the current worth or value of a project which is adjusted as…

Q: What type of testing are ratios?

A: Ratio:   It is a number expressed in terms of another to establish a relationship among them.

Q: Distinguish between the terms sampling risk and nonsampling risk.

A: Introduction: The risk of sampling is that the conclusion based on a sample may differ from the…

Q: What kinds of controls are the most difficult to show in a balanced scorecard?

A: The balanced scorecard is a too for measuring the performance.

Q: What do you mean by sensitivity analysis?What are the setting and the constraints of the sensitivity…

A: Sensitivity analysis is an analysis in finance, which used to help in an evaluation of that how an…

Q: Give an example of a Sensitivity Analysis performed for Mutually Exclusive Alternatives?

A: Mutually exclusive alternatives are those alternatives out of which only one can be selected at a…

Q: What are the differences and similarities between the Sharpe and Treynor measures?

A: Each asset or portfolio has a separate level of return and associated risk in response to the…

Q: What factors affect sample size?

A: Definition:   Sampling: Sampling allows an individual to obtain information about the population of…

Q: What differential analysis and why would we use it?

A: Decision making is the process of taking the decisions based on the costs and different kind of…

Q: What is the relationship between Evidence and Detection Risk?

A: Detection risk is the risk that an auditor will not find a material misstatement in a client's…

Q: What is the replacement analysis?

A: Replacement analysis is one of the keys examinations in capital budgeting.

Q: Explain Variation on the Preferred IRR and IRR Lookback?

A: The internal rate of return (IRR) is the measure used in the financial analysis of an investment…

Q: What is the risk of assessing Control Risk too high?

A: Control risk refers to the probability of financial statements that were considered wrongly stated…

Q: Describe allowance for sampling risk (or precision)?

A: