The Audit Procedures for the Subsequent Events Review Can Be

question 22

Multiple Choice

The audit procedures for the subsequent events review can be divided into two categories: (1) procedures normally integrated as a part of the verification of year-end account balances and (2) those performed specifically for the purpose of discovering subsequent events.Which one of the following procedures is in the first category?

• A) Review journals and ledgers of year 2 to determine the existence of any transaction related to year 1.
• B) Obtain a management representation letter written by the client.
• C) Examine subsequent period sales and purchases transactions to determine whether the cutoff is accurate.
• D) Inquire of the client regarding contingent liabilities.

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Definitions:

Induced Voltage

Voltage generated within a conductor by its motion through a magnetic field or by a changing magnetic field.

Current-Limiting

Describing devices or methods intended to limit the maximum current that can flow through a circuit, thus protecting the circuit from damage.

Impedance

A measurement of resistance to the flow of alternating current in a circuit, represented by the symbol Z and measured in ohms.

Power Factor

A comparison of the true power (watts) to the apparent power (volt-amperes) in an AC circuit.