Which Type of Audit Evidence Can the Auditor Use in Support

question 90

Multiple Choice

Which type of audit evidence can the auditor use in support of the 'accuracy of accounts receivable' audit objective?

• A) direct confirmation with customer
• B) examination of title for ownership of asset
• C) physical examination
• D) examination of invoice from vendor

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Definitions:

Risk

The potential for loss or the chance that an investment's actual return will differ from the expected return.

Uncertainty

A situation characterized by the lack of predictability or definite knowledge about an outcome or result.

Profit

The financial gain realized when the amount of revenue gained from a business activity exceeds the expenses, costs, and taxes involved in sustaining the activity.

Balance Sheet Hedge

A financial strategy used to reduce the risk of currency fluctuations affecting the value of assets and liabilities reported in a company's balance sheet.