In a Performance Audit of a Not-For-Profit Organization, Procedures That

question 45

Multiple Choice

In a performance audit of a not-for-profit organization, procedures that auditors would follow to gain an understanding of management controls would NOT include

• A)Reviewing policy manuals.
• B)Sending questionnaires to clients.
• C)Discussing controls with employees.
• D)Flowcharting appropriate systems.

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Definitions:

Consolidation Process

The method by which a parent company combines its financial statements with those of its subsidiaries to produce a single set of financial statements representing the entire group of companies.

Voting Common Stock

Shares that grant the shareholder the right to vote on corporate policies and board elections.

Equity Method

An accounting technique used by companies to assess the profits earned through their investment in other companies.

Internal Accounting

The process of preparing financial information for use by management within the organization, not for external stakeholders.