Which of the Following Procedures Would an Auditor Most Likely

question 1041

Multiple Choice

Which of the following procedures would an auditor most likely perform in auditing the statement of cash flows?

• A) Reconcile the amounts included in the statement of cash flows to the other financial statements' amounts.
• B) Vouch a sample of cash receipts and disbursements for the last few days of the current year.
• C) Reconcile the cutoff bank statement to the proof of cash to verify the accuracy of the year-end cash balance.
• D) Confirm the amounts included in the statement of cash flows with the entity's financial institution.

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Definitions:

Stockholders' Equity

The residual interest in the assets of an entity after deducting its liabilities, representing the ownership interest of the shareholders.

Fees Earned

Income earned through the delivery of services.

Wages Expense

An account representing the total cost of labor paid to employees, typically recorded over a specific accounting period.

Dividends

Payments made by a corporation to its shareholder members from the company's earnings.