An Auditor Should Perform Alternative Procedures to Substantiate the Existence

question 107

Multiple Choice

An auditor should perform alternative procedures to substantiate the existence of accounts receivable when

• A)no reply to a positive confirmation request is received.
• B)no reply to a negative confirmation request is received.
• C)collectability of the accounts receivable is in doubt.
• D)pledging of the accounts receivable is probable.

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Definitions:

Antitrust

Laws and regulations designed to promote competition and prevent monopolies or anti-competitive practices in the marketplace.

Multinationals

Large corporations that operate and deliver products or services in more than one country beyond their home base.

High-Water Mark

The highest peak in value an investment fund or account has reached, often used as a threshold for calculating performance fees.

Standard Oil Trust

A corporate entity created by John D. Rockefeller in the late 19th century, becoming the largest and most famous example of a monopoly through its control of the oil industry.