Which of the Following Audit Procedures Is Most Likely to Be

question 58

Multiple Choice

Which of the following audit procedures is most likely to be performed during the planning phase of the audit?

• A)Obtain an understanding of the client's risk assessment process
• B)Identify specific internal control activities that are designed to prevent fraud
• C)Evaluate the reasonableness of the client's accounting estimates
• D)Test the timely cutoff of cash payments and collections

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Definitions:

Statement of Stockholders' Equity

A financial document that shows the changes in the value of a company's equity over a reporting period.

Cash

Liquid assets held by a company or individual, used for transactions or as a reserve for future needs.

Accounts Receivable

Represents the money owed to a company by its customers for goods or services that have been delivered or used but not yet paid for.

Supplies

Materials or items used in the operation of a business or needed in the process of providing a service or making goods.