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:

Coefficient Of Determination

A measure used in statistical analysis that assesses the goodness of fit of a model, representing the proportion of variance in the dependent variable that is predictable from the independent variable(s).

Regression Analysis

A statistical method for modeling the relationship between a dependent variable and one or more independent variables.

Independent Variables

Variables in an experiment or model that are manipulated or controlled by the researcher to investigate their effect on dependent variables.

Dependent Variables

Variables in an experiment or model that are expected to change in response to changes in independent variables.