Which of the Following Is a Procedure That Requests a Direct

question 5

Multiple Choice

Which of the following is a procedure that requests a direct written response to the auditor form a third party?

• A) Inquiry
• B) Confirmation
• C) Inspection
• D) Observation

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Definitions:

Expenses

Costs incurred during the operation of a business, such as rent, salaries, and utilities, required for generating revenue.

Revenue

The overall earnings accrued from transactions involving goods or services at the heart of a business's primary operations.

Retrospective Approach

The retrospective approach involves revising previously issued financial statements to reflect changes in accounting policy as if the new policy had always been in effect.

Change In Accounting Principle

An adjustment made to the accounting methods used by a company, requiring retrospective restatement of prior financial statements to reflect the new principle.