Auditors May Choose Not to Confirm Accounts Payable Because

question 46

Multiple Choice

Auditors may choose not to confirm accounts payable because:

• A)Confirmation obtains evidence identical to that obtained by cutoff tests.
• B)Other reliable external evidence to support the balances is likely to be available.
• C)A reading of the corporate minutes reveals that confirmation is unnecessary.
• D)The balances due will have changed between the year-end and the date of confirmation.

Understand the role of internal controls in managing cash.

Distinguish between cash, cash equivalents, and other types of financial instruments.

Understand the implications of NSF checks and bank service charges on cash management.

Calculate and interpret the Days' Cash on Hand ratio.

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Definitions:

First-generation Immigrants

Individuals who have moved from their country of origin to reside in a new country, making them the first of their family to do so.

Secure Identities

The development or maintenance of a strong and stable sense of self in various contexts.

Psychosocial Moratorium

A period during adolescence when adult responsibilities are postponed as young people explore various commitments, values, and roles.

"MAMA" Cycle

An acronym for "Moratorium-Achievement-Moratorium-Achievement," describing a cycle of identity exploration and commitment.