Substantive Tests Must Be Designed to Tests Specific Audit Objectives

question 18

Multiple Choice

Substantive tests must be designed to tests specific audit objectives.
REQUIRED: For the following specific audit procedures, indicate the assertion that is being tested. Use the following letters, placing your response in the space provideD.
-Inquire of accounting and purchasing personnel about unrecorded payables.

• A)Existence or occurrence
• B)Completeness
• C)Valuation or allocation
• D)Rights and obligations
• E)Presentation and disclosure

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Definitions:

Risk-Free Rate

The theoretical rate of return on an investment with zero risk, often represented by the yield of government bonds.

Stock Index

A statistic that reflects the composite value of a selected group of stocks, representing their aggregate performance.

Dividend

A corporation's distribution of earnings to its shareholders, usually made as a payment.

Soybean Future

A contractual agreement for the future delivery of soybeans at a predetermined price, used for hedging and speculating in the commodities market.