Which of the Following Audit Procedures Would an Auditor Most

question 37

Multiple Choice

Which of the following audit procedures would an auditor most likely perform to test controls relating to management's valuation assertion for accounts receivable?

• A)Verify that extensions and footings on the entity's sales invoices and monthly customer statements have been recomputed.
• B)Inspect the entity's reports of prenumbered shipping documents that have not been recorded in the sales journal.
• C)Compare the invoiced prices on prenumbered sales invoices to the entity's authorized price list.
• D)Inquire about the entity's credit-granting policies and test whether credit checks have been consistently applied to new customers.

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Definitions:

Unethical Sales Behaviour

Practices in sales that are dishonest, deceptive, or violate ethical standards.

Canadian Whistle-blowers

Individuals in Canada who expose illegal, unethical, or harmful activities within public or private organizations, often facing legal and social risks.

U.S. Securities and Exchange Commission

A U.S. federal agency responsible for enforcing the federal securities laws, proposing securities rules, and regulating the securities industry, the nation's stock and options exchanges, and other related activities and organizations.

Systematic Thinking

A methodical approach to problem solving or decision making that is organized and logical.