When the Auditor Uses Tracing as an Audit Procedure for Tests

question 52

Multiple Choice

When the auditor uses tracing as an audit procedure for tests of transactions she is primarily concerned with which audit objective?

• A)Occurrence
• B)Completeness
• C)Cutoff
• D)Classification

Determine the significance of the accounts receivable turnover in managing receivables.

Calculate and interpret the times interest earned ratio to assess interest payment capacity.

Understand operating cycle calculations to manage cash flow effectively.

Evaluate the equity multiplier to understand the level of financial leverage.

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Definitions:

Medicare Benefits

The healthcare services and coverage provided under Medicare, a federal health insurance program for people aged 65 and older, and some younger individuals with disabilities.

Terminally Ill

Referring to a person suffering from a disease that is incurable and expected to lead to death within a short period.

Managed Care

A health care delivery system organized to manage cost, utilization, and quality, often through contracted arrangements with providers.

HMO

Health Maintenance Organization; a medical insurance group that provides health services for a fixed annual fee.