Audit Documentation Often Includes a Client-Prepared, Aged Trial Balance of Accounts

question 16

Multiple Choice

Audit documentation often includes a client-prepared, aged trial balance of accounts receivable as of the balance sheet date. The audit team uses this aging primarily to:

• A)evaluate internal control over credit sales.
• B)test the accuracy of recorded charge sales.
• C)estimate credit losses.
• D)verify the existence of the recorded receivables.

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Definitions:

Tort

A civil wrong that causes someone else to suffer loss or harm resulting in legal liability for the person who commits the tortious act.

Defamation

The process of making untrue declarations about an individual that harm that individual's good name.

Falsehood

An untrue statement made with the intent to deceive.

Third Party

An entity not directly involved in a contract or transaction but who may be affected by its outcomes.