The Presence of an Audit Trail Is Critical to the Integrity

question 36

Essay

The presence of an audit trail is critical to the integrity of the accounting information system.Discuss three of the techniques used to preserve the audit trail.

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Definitions:

Balance Sheet

A financial statement that shows a company's assets, liabilities, and shareholders' equity at a specific point in time, providing a basis for computing rates of return and evaluating its capital structure.

Cash Dividend

A payment made in cash to shareholders, typically distributed from a company's earnings.

Retained Earnings

The portion of a company's profit that is held or retained and saved for future use, investment, or debt repayment, instead of being paid out as dividends.

Dividend Policy

A company's strategy or guideline determining the amount of profits paid out to shareholders as dividends versus being reinvested in the business.