An Auditor Is Concerned About a Policy of Management Override

question 32

Multiple Choice

An auditor is concerned about a policy of management override as a limitation of internal control. Which of the following tests would best assess the validity of the auditor's concern?

• A)Matching purchase orders to accounts payable.
• B)Verifying that approved spending limits are not exceeded.
• C)Tracing sales orders to the revenue account.
• D)Reviewing minutes of board meeting.

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Definitions:

Co-Surety

A joint surety; one who assumes liability jointly with another surety for the payment of an obligation.

Debtor

An individual or organization that owes money or debt to another entity.

Default

A failure to fulfill a legal obligation, especially to repay a loan or appear in a court of law.

Lien

A legal right or claim against a property, typically used as security for a debt or obligation.