When Auditors Are Performing Substantive Procedures and Identify Misstatements They

question 32

Multiple Choice

When auditors are performing substantive procedures and identify misstatements they did not expect, they _______.

• A)reconsider their audit strategy and audit plan, and determine if the nature, timing, or extent of internal control testing needs to be modified
• B)reconsider their audit strategy and audit plan, and determine if the nature, timing, or extent of substantive procedures need to be modified
• C)should seek to obtain written representations from management as to the accuracy of the balances in question
• D)should consider withdrawing from the engagement

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Definitions:

Cash Dividends

Profits paid out to shareholders by a corporation from its earnings in the form of cash.

Financing Activities

Transactions and events that affect the equity and long-term liabilities of a company, including issuing shares, repaying loans, and paying dividends.

Cash Dividends

Payments made by a corporation to its shareholders from its profits or reserves, distributed in the form of cash.

Financing Activities

Transactions and business events that involve raising funds to support company operations, investing activities, and shareholder returns, typically through borrowing or issuing equity.