An Entity's Income Statements Were Misstated Due to the Recording

question 11

Multiple Choice

An entity's income statements were misstated due to the recording of a journal entry that involved debits and credits to an unusual combination of expense and revenue accounts.The auditor is likely to most likely to detect this irregularity by

• A)Tracing a sample of journal entries to the general ledger.
• B)Evaluating the effectiveness of the internal control system policies and procedures.
• C)Investigating the reconciliation of control accounts with the subsidiary records.
• D)Performing analytical procedures designed to disclose differences between the balances in the accounts and budgeted amounts.

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Definitions:

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