When Making a Review of Interim Financial Information, the Auditor's

question 59

Multiple Choice

When making a review of interim financial information, the auditor's work consists primarily of:

• A) confirming and verifying account balances at the interim date.
• B) studying and evaluating limited amounts of documentation supporting the interim financial information.
• C) scanning and reviewing client- prepared, internal financial statements.
• D) making inquiries and performing analytical procedures concerning significant accounting matters.

---

Definitions:

Dividend Increase

An increase in the amount of payment made by a corporation to its shareholders, usually realized when the company has achieved additional profits.

Additional Financing

Funds that are raised by a company through borrowing or issuing new equity, in addition to its existing capital.

Asset Turnover

A financial ratio that measures the efficiency of a company's use of its assets in generating sales revenue; the higher the turnover, the better.

Current Ratio

An indicator of a company's ability to meet short-term debt obligations; calculated by dividing current assets by current liabilities.