The Audit Objective Which Requires the Auditor to Determine That

question 103

Multiple Choice

The audit objective which requires the auditor to determine that loans payable on the loans payable schedule are properly classified can be tested with the following procedure:

• A) Review the notes to determine whether any are with related parties.
• B) Confirm loans payable.
• C) Examine corporate minutes for loan approval.
• D) Examine notes, minutes, and bank confirmations for restrictions.

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Definitions:

Criminal Liability

The legal responsibility a person or entity has for committing an act that is considered a crime by law.

Employer

An individual or organization that hires and pays people to perform work or provide services.

Third Restatement

A reference in U.S. legal doctrine, particularly in the context of tort law, to the latest revision of a comprehensive guide on legal principles.

Principal Incapacitated

Principal incapacitated refers to a situation where the principal party in a legal or financial agreement is unable to make decisions or fulfill their role, due to physical or mental incapacity.