An Internal Auditor Is Using a Spreadsheet Application to Review

question 254

Multiple Choice

An internal auditor is using a spreadsheet application to review a cash flow forecast prepared by management. Which of the following correctly identifies the type of evidence this information represents?

• A) Competent, corroborative evidence of future working capital requirements.
• B) Sufficient, analytical evidence of the cash flow position at a given point of time in the future.
• C) Competent, documentary evidence of future cash flow changes within the organization.
• D) Sufficient, circumstantial evidence of the future solvency of the organization.

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Definitions:

Consolidation

A merger in which a new firm is created and both the acquired and acquiring firm cease to exist.

Merger

The combination of two or more companies into one, where one company survives and the others cease to exist, aiming to increase market share and efficiency.

Merger

The combination of two or more companies into a single entity, often with the goal of achieving synergies or efficiencies.

Consolidation

The process of combining multiple entities, assets, or financial statements into a single entity or set of financial statements.