An Auditor's Purpose in Reviewing Credit Ratings of Customers with Delinquent

question 493

Multiple Choice

An auditor's purpose in reviewing credit ratings of customers with delinquent accounts receivable most likely is to obtain evidence concerning management's assertions about:

• A) Understandability and classification.
• B) Existence.
• C) Rights and obligations.
• D) Valuation and allocation.

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Definitions:

Estimated Data

Data that has been predicted or approximated based on available information, often used for planning and forecasting purposes.

Generally Accepted Accounting Principles

A set of accounting standards and procedures that are used in the United States to govern financial reporting and accounting.

Managerial Accounting Reports

Financial reports that provide detailed and specific information to a company's management to aid in decision making, planning, and controlling activities.

Organization Chart

A diagram that shows the structure of an organization and the relationships and relative ranks of its parts and positions/jobs.