Which of the Following Is Not Completed During Phase IV

question 20

Multiple Choice

Which of the following is not completed during phase IV of the audit?

• A) Obtain a client representation letter.
• B) Read information in the annual report to make sure that it is consistent with the financial statements.
• C) Perform substantive tests of transactions.
• D) Perform final analytical procedures.

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Definitions:

Unsystematic Risk

The risk of price changes in a company's stock due to factors specific to the company, as opposed to market-wide factors.

Treasury Bills

Short-term U.S. government debt obligations maturing in one year or less, considered a safe and liquid investment.

Risky Portfolio

A collection of investments that has a higher standard deviation, but potentially higher returns.

Unsystematic Portion

The segment of risk in an investment portfolio that can be mitigated through diversification, specific to individual securities.