Which of the Following Is a Procedure Used in an Audit

question 40

Multiple Choice

Which of the following is a procedure used in an audit where there is a heightened risk of fraud related to accounts payable and other related expense accounts?

• A)Send blank confirmations to vendors that ask them to furnish information about all outstanding invoices,payment terms,and payment histories.
• B)Scan journals for unusual or large year-end transactions and adjustments.
• C)Obtain and examine documentation for payments of invoices that are for amounts just under the limit that typically requires some level of approval.
• D)All the above.

---

Definitions:

Actuarially Assumed

Actuarially assumed involves estimations or calculations made based on actuarial methods, often related to insurance or pensions, to predict future obligations or costs.

Defined Contribution Pension Plan

A retirement plan where an employer, employee or both make contributions, with future benefits dependent on investment performance.

IRS Approved

Indicates that a financial arrangement or practice has been sanctioned or recognized by the Internal Revenue Service.

Defined Benefit Pension Plan

A retirement plan where employee benefits are calculated on a formula including salary history and duration of employment, with the employer bearing investment risk.