The Statement That Best Expresses the Auditor's Responsibility with Respect

question 69

Multiple Choice

The statement that best expresses the auditor's responsibility with respect to events occurring between the balance sheet date and the end of the audit is that:

• A)The auditor has no responsibility for events occurring in the subsequent period unless these events affect transactions recorded on or before the balance sheet date.
• B)The auditor's responsibility is to determine that a proper cutoff has been made and that transactions recorded on or before the balance sheet date actually occurred.
• C)The auditor is fully responsible for events occurring in the subsequent period and should extend all detailed procedures through the last day of field work.
• D)The auditor is responsible for determining that a proper cutoff has been made and performing a general review of events occurring in the subsequent period.

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Definitions:

Regular Cash Dividend

A payment made by a company to its shareholders, usually in the form of cash, out of its profits or reserves on a regular basis, such as quarterly or annually.

Stock Price

The cost of purchasing a share of a company's stock, representing partial ownership in the company.

Cum Dividend

A term indicating that a stock is trading with the right to receive the most recently declared dividend.

Shareholders of Record

Shareholders of record are individuals or entities that are officially recorded by a company as the legal owners of its shares on a specific date.