During Discussion and Inquiry with Management,the Auditor Determined That the Company

question 18

Multiple Choice

During discussion and inquiry with management,the auditor determined that the company has started a new line of business that requires a substantial investment in manufacturing equipment.The company has also implemented wireless scanning for its warehouse and inventory.Which of the following techniques will the auditor likely use to corroborate these statements?

• A)further inquiry of the accounting personnel
• B)inspection of recent sales invoices for types of sales
• C)use of analytical procedures,comparing last year to this year
• D)observation during the plant tour

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Definitions:

Short-Form Merger

A type of merger that occurs when a parent company absorbs a subsidiary without needing approval from the subsidiary's shareholders.

Parent-Sub Merger

is a type of corporate merger where the parent company merges with its subsidiary, resulting in the subsidiary becoming part of the parent company.

Subsidiary's Stock

Shares representing ownership in a company that is owned or controlled by another entity, often referred to as the parent company.

Appraisal Rights

The legal right of a company's minority shareholders to have their shares appraised and to receive monetary compensation in the event of certain corporate actions, like mergers.