An Auditor Wants to Perform Tests of Controls on a Client's

question 53

Multiple Choice

An auditor wants to perform tests of controls on a client's cash disbursement procedures.If the control procedures leave no audit trail or documentary evidence,the auditor is most likely to test the procedures by

• A)confirmation and observation.
• B)confirmation and analytical procedures.
• C)observation and inquiry.
• D)inquiry and analytical procedures.

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Definitions:

Compounded Semi-annually

The process of adding interest to the principal sum of a loan or deposit on a twice-yearly basis, resulting in interest on interest.

Payments

Amounts of money paid by one party to another, often at regular intervals, in exchange for goods or services.

Repaid

The act of paying back money that was borrowed from a person, bank, or financial institution.

Interest Rate

The ratio at which interest is applied to money loaned by a borrower from a lending party.