In Connection with the Audit of an Issue of Long-Term

question 91

Multiple Choice

In connection with the audit of an issue of long-term bonds payable, the audit team should:

• A)determine whether bondholders are persons other than owners, directors, or officers of the company issuing the bond.
• B)calculate the effective interest rate to see if it is substantially the same as the rates for similar issues.
• C)decide whether the bond issue was made without violating state or local law.
• D)ascertain that the client has obtained the opinion of counsel on the legality of the issue.

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Definitions:

Interviewing

A method used by organizations to assess potential candidates for a job, often involving a series of questions to evaluate their qualifications and compatibility with the company culture.

Incentive-Pay Program

A compensation strategy designed to reward employees based on their performance or achievement of specific goals.

Profit-Sharing Plan

A plan in which employees receive additional compensation based on the profitability of the entire business.

Insurance Benefit

A payment or service provided under an insurance policy to cover losses or expenses incurred by the insured.