Which of the Following Procedures Would Auditors Most Likely Perform

question 38

Multiple Choice

Which of the following procedures would auditors most likely perform to obtain evidence about the occurrence of subsequent events?

• A)Confirming a sample of material accounts receivable established after year-end.
• B)Comparing the financial statements being reported on with those of the prior period.
• C)Reading minutes of meetings of owners, management, or those charged with governance held after the date of the financial statements.
• D)Inquiring as to whether any unusual adjustments were made just before year-end.

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Definitions:

Inflation

The rate at which the general level of prices for goods and services is rising, leading to a decrease in the purchasing power of money.

Grease the Wheels

An expression used to describe actions that facilitate or ease the progress of a process, activity, or operation, often implying making things run more smoothly and efficiently.

Political Business Cycle Theory

A theory suggesting that elected officials may manipulate economic policies to produce favorable economic conditions ahead of elections to increase their chances of reelection.

Discount Rate

The interest rate on the loans that the Fed makes to banks.