To Best Ascertain That a Company Has Properly Included Merchandise

question 35

Multiple Choice

To best ascertain that a company has properly included merchandise that it owns in its ending inventory,the auditors should review and test the:

• A)Terms of the open purchase orders.
• B)Purchase cutoff procedures.
• C)Contractual commitments made by the purchasing department.
• D)Purchase invoices received on or around year-end.

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Definitions:

Sarbanes-Oxley Act

A law enacted in 2002 aimed at improving corporate governance and preventing corporate fraud through stringent accounting and auditing regulations.

Corporate Wrongdoers

Companies or their representatives who have engaged in illegal, unethical, or improper conduct.

Ethical And Socially Responsible

Conducting oneself or an organization in a manner that is mindful of the welfare of society and operates within ethical standards and principles.

Teleological

Pertaining to the explanation of phenomena by the purpose they serve rather than by postulated causes.