Before Proceeding with Tests of Details of Cash Balances, the Auditor

question 12

Multiple Choice

Before proceeding with tests of details of cash balances, the auditor should _______.

• A)attempt to confirm cash balances with the firms' creditors
• B)ensure that an understanding has been obtained regarding the auditor and its environment and the importance of cash balances to the entity
• C)ensure that an understanding has been obtained regarding the entity and its environment and the importance of cash balances to the entity
• D)issue a tentative audit opinion related to cash

---

Definitions:

Morality

Principles or rules concerning the distinction between right and wrong or good and bad behavior.

Social Facts

Aspects of social life that exist outside and independently of individual consciousness and exert influence on individual behavior, as conceptualized by Émile Durkheim.

Western Marxism

A form of Marxist theory that emphasizes culture and ideology as significant factors in the struggle for social change, diverging from orthodox Marxism's focus on economic forces.

Capitalism

An economic system characterized by private or corporate ownership of capital goods, by investments determined by private decision, and by prices, production, and the distribution of goods determined mainly by competition in a free market.