To Gather Evidence About Transactions with Related Parties an Auditor

question 65

Multiple Choice

To gather evidence about transactions with related parties an auditor would most likely:

• A)Send account confirmations.
• B)Perform analysis of receivables turnover.
• C)Scan the receivables sub ledger for credit balances.
• D)Scan the aged trial balance for names of officers and directors.

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Definitions:

Interest Payment

The payment made by a borrower to a lender as compensation for the use of borrowed money.

Four-Month Note

A promissory note or financial instrument that matures or comes due in four months.

Interest Calculation

The process of determining the interest charge on a loan or financial holding, based on the principal, rate, and period.

Time Expression

Phrases or terms used to indicate a specific period during which an event occurs or is scheduled to take place.