The Audit Procedures for the Subsequent Events Review Can Be

question 58

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 would be in the second category?

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

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Definitions:

Water Table

The surface between the unsaturated zone and the saturated zone, as in the top of groundwater in an unconfined aquifer.

Stalactites

Icicle-shaped formations that hang from the ceilings of caves, formed by the deposit of minerals from dripping water.

Calcite

A common and widely distributed mineral consisting of calcium carbonate (CaCO3), important in the formation of limestone and marble.

Stalactite

A conical or cylindrical cave formation that hangs from the ceiling of a cave and is composed mostly of calcium carbonate.