Which of the Following Is the Primary Reason the Auditor

question 43

Multiple Choice

Which of the following is the primary reason the auditor obtains and reviews a cutoff bank statement?

• A)Verify the balance of cash per the bank's general ledger at the balance sheet date.
• B)Verify the reconciling items on the year-end bank reconciliation.
• C)Test for intentional lapping of bank transfers.
• D)Foot the cutoff bank statement for completeness.

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Definitions:

Dividend Payout Policy

The policy a company follows in deciding how much it will pay out to shareholders in dividends.

Put

A financial option contract giving the owner the right but not the obligation to sell a specified amount of an underlying asset at a set price within a specified time.

Call

An options contract that gives the holder the right, but not the obligation, to buy a specified amount of an underlying asset at a set price within a specified time.

Black-Scholes OPM

The Black-Scholes Option Pricing Model, a foundational model for pricing European options, calculating the theoretical price of options by estimating future volatility.