The Audit Procedures for the Subsequent Events Review Can Be

question 56

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 of the following procedures is in the second category?

• A) Compare the subsequent-period purchase price of inventory with the recorded cost as a test of lower-of-cost-or-market valuation.
• B) Test the collectability of accounts receivable by reviewing subsequent period cash receipts.
• C) Examine subsequent period sales and purchases transactions to determine whether the cutoff is accurate.
• D) Correspond with legal counsel.

---

Definitions:

Political Climate

The general mood, attitudes, and sentiments regarding politics and governance within a particular region or country.

Employee Turnover

The rate at which employees leave a company and are replaced by new employees, often used as a metric to assess corporate health and job satisfaction.

Political Battles

Conflict or struggles for power, influence, or resources within organizational, governmental, or societal contexts.

Fundamental Attribution Error

The tendency to overestimate the effect of personality or disposition and underestimate the effect of the situation on other people's behavior.