An Auditor Is Performing a Credit Analysis of Customers with Balances

question 36

Multiple Choice

An auditor is performing a credit analysis of customers with balances over 60 days due.She is most likely obtaining evidence for which audit related objective?

• A)Realizable value
• B)Existence
• C)Completeness
• D)Occurrence

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Definitions:

Overpriced Securities

Financial instruments that are valued higher in the market than their intrinsic worth, often due to speculative activities.

Negative Alphas

A situation where an investment's return is less than the return predicted by its associated risk (alpha less than 0).

Risk-Free Rate

A revised definition for clarity: The theoretical return of an investment with zero risk, often represented by the yield on government treasury bonds.