Which of the Following Procedures Would an Auditor Most Likely

question 46

Multiple Choice

Which of the following procedures would an auditor most likely perform in planning a financial statement audit?

• A)Inquiring of the client's legal counsel concerning pending litigation.
• B)Comparing the financial statements to anticipated results.
• C)Examining computer-generated exception reports to verify the effectiveness of internal controls.
• D)Searching for unauthorized transactions that may aid in detecting unrecorded liabilities.

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Definitions:

Social Security Taxes

Taxes imposed on both employers and employees to fund the Social Security program, which provides retirement, disability, and survivor benefits.

State Unemployment Credit

A tax credit offered to employers by the state, related to unemployment insurance payments.

FUTA Purposes

Relates to the Federal Unemployment Tax Act, which imposes a payroll tax on businesses to fund state workforce agencies.

Federal Income Tax

This is a tax levied by the U.S. federal government on the annual earnings of individuals, corporations, trusts, and other legal entities.