Physical Examination

question 103

Multiple Choice

Physical examination

• A) is a direct means of verifying that an asset really exists.
• B) is sufficient evidence to verify that the existing assets are owned by the client.
• C) can be used for both tangible assets and documents.
• D) is not generally a reliable type of audit evidence.

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Definitions:

Acceptance

In contract law, it is the act of agreeing to the terms of an offer, thus creating a binding contract.

Commercial Reasonableness

A legal standard that measures the fairness of business practices, actions, or decisions in a commercial context.

Subjective Standard

A benchmark for judgment based on personal opinions, feelings, or tastes, rather than external facts.

Good Faith

An intention to act with honesty, fairness, and integrity in dealings, without seeking to deceive or defraud.