After Making Inquiries About Credit Granting Policies, an Auditor Selects

question 242

Multiple Choice

After making inquiries about credit granting policies, an auditor selects a sample of sales transactions and examines evidence of credit approval. This test of controls most likely supports management's financial statement assertion(s) of:

• A) Option A
• B) Option B
• C) Option C
• D) Option D

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Definitions:

Strict Liability

Legal responsibility placed on an individual for the results of his actions irrespective of whether he was culpable or at fault.

Breached A Duty

Occurs when an individual or entity fails to fulfill their obligations or duties as required by law or contract.

Plaintiff

An individual or party who initiates a lawsuit or legal action against another party in a court of law.

Ultrahazardous Activity

An activity that poses an inherent risk of serious harm to people or property, even when utmost care is exercised to prevent harm.