By Tracing Receiving Reports Issued at and Before Year-End to Vendors

question 57

Multiple Choice

By tracing receiving reports issued at and before year-end to vendors' invoices and making sure they are included in accounts payable, the auditor is testing for:

• A) kiting.
• B) unrecorded obligations.
• C) theft of merchandise by employees.
• D) lapping.

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Definitions:

Confirmation Bias

Searching for (and giving more weight to) information and opinion that confirms what you believe rather than information and opinion to the contrary.

Over-Optimism

A tendency to have an overly positive outlook or expectations, particularly regarding projects or financial forecasts.

Frame Dependence

A psychological theory indicating that people's decisions are influenced by the way choices are framed or presented to them.

Technology Stocks

Shares in companies that operate in the technology sector, including hardware, software, and IT services.