The Auditor Must Gather Sufficient and Appropriate Evidence During the Course

question 11

Multiple Choice

The auditor must gather sufficient and appropriate evidence during the course of the audit. Sufficient evidence must

• A) be well documented and cross-referenced in the audit documents.
• B) be based on sources that are external to company.
• C) provide evidence that prove or disprove an audit objective/assertion.
• D) be persuasive enough to enable the auditor to issue an audit report.

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Definitions:

Accounts Payable

This term signifies the amount of money a company owes to its suppliers or vendors for goods or services received but not yet paid for.

Accrue Expense

An accounting method where expenses are recognized when incurred but not yet paid, reflecting the economic reality of the expense.

Prepaid Utilities

Expenses paid in advance for utilities services, recognized as assets on the balance sheet until they are consumed.

Accounting Cycle

The collective process of recording and processing the accounting events of a company, starting from the transaction occurrence to the preparation of financial statements.