During the Risk Assessment Phase, the Audit Team Should Gain

question 78

Multiple Choice

During the risk assessment phase, the audit team should gain an understanding of the client's procedures for __________.

• A)identifying related parties and authorizing transactions with related parties.
• B)authorizing transactions with related parties and disclosing the relationships and transactions in the financial statements.
• C)authorizing transactions with related parties.
• D)All of the above are correct.

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Definitions:

Sole Shareholder

An individual who owns 100% of the shares of a corporation, making them the exclusive owner.

Stock Exchange

A marketplace where securities, such as stocks and bonds, are bought and sold.

Liability

The state of being legally responsible for something, especially in terms of owing money or other obligations.

Incorporators

Incorporators are individuals or entities that are involved in creating and registering a corporation with the relevant state authority, completing and filing its articles of incorporation.