All of the Following Are Required by the Auditor Before

question 76

Multiple Choice

All of the following are required by the auditor before allowing the client to take inventory before year-end except which one?

• A)Absence of "red flags".
• B)Internal control is weak.
• C)The auditor can effectively test the year-end balance through a combination of analytical procedures and selective testing of transactions between the physical count and the year-end.
• D)The auditor reviews the intervening transactions for evidence of any manipulation or unusual activity.

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Definitions:

Descriptive Statement

A statement providing detailed information or explanations about a subject to convey understanding or clarify meaning.

Financial Statements

Consolidated reports created from a company's accounting data, including the balance sheet, income statement, and cash flow statement, used to communicate the financial performance and condition of the company.

Reporting Period

The specific span of time covered by financial statements, typically a fiscal quarter or year, over which a company reports its financial performance.

Footnotes

Additional notes provided in financial statements offering more detailed information about the accounts and policies applied.