In an Effort to Satisfy the Completeness Objective,the Auditor Could

question 48

Multiple Choice

In an effort to satisfy the completeness objective,the auditor could perform which of the following test of details of balance procedures?

• A)Trace the book balance on the reconciliation to the general ledger.
• B)Trace outstanding cheques to subsequent period bank statements.
• C)Obtain and test a cutoff bank statement.
• D)Review financial statements to make sure that material savings accounts and certificates of deposit are disclosed separately.

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Definitions:

Current Ratio

A financial metric assessing a firm's capacity to settle debts due within a year by comparing its current assets to its current liabilities.

Vertical Analysis

The presentation of a company’s financial statements in common-size form.

Horizontal Analysis

A side-by-side comparison of two or more years’ financial statements.

Acid-Test Ratio

A financial metric used to evaluate a company's ability to pay off its current liabilities without relying on the sale of inventory.