The Audit Procedures for the Subsequent Events Review Can Be

question 80

Multiple Choice

The audit procedures for the subsequent events review can be divided into two categories: (1) procedures normally integrated as a part of the verification of year- end account balances and (2) those performed specifically for the purpose of discovering subsequent events. Which of the following procedures is in category 2?

• A) Correspond with legal counsel.
• B) Compare the subsequent- period purchase price of inventory with the recorded cost as a test of lower- of- cost- or- market valuation.
• C) Examine subsequent period sales and purchases transactions to determine whether the cutoff is accurate.
• D) Test the collectibility of accounts receivable by reviewing subsequent period cash receipts.

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Definitions:

Authority

The power or right to give orders, make decisions, and enforce obedience, often within a specific context such as an organization or institution.

Influence

The power to affect or change behavior, opinions, or the course of events through direct actions or persuasions.

Control

The ability to shape or control the actions of others or the progression of events.

Extrinsic Rewards

Benefits and/or rewards that come from an external source, such as money, promotions, or praise.