Which One of the Following Best Describes the Auditor's Responsibilities

question 108

Multiple Choice

Which one of the following best describes the auditor's responsibilities regarding appropriate authorizations in the sales/collections cycle?

• A) Credit must be authorized before the sale.
• B) Goods must be shipped after the authorization.
• C) Prices must be authorized.
• D) All of the above should be of concern to the auditor.

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Definitions:

Restructure Loan

The process of modifying the terms of a loan agreement, typically to provide relief to the borrower by reducing interest rates, extending payment periods, or forgiving part of the loan.

Financial Difficulties

Situations where an individual or organization struggles to manage their money effectively, often leading to debt or bankruptcy.

Foreclosure

The legal process by which a lender takes control of a property, evicts the homeowner, and sells the home after the homeowner fails to make full principal and interest payments on their mortgage.

Matching Principle

An accounting principle that dictates expenses should be reported in the same period as the revenues they help to generate, to ensure financial statements accurately reflect business activities.