The Auditor's Primary Concern in Performing Audit Procedures of the Write-Off

question 21

Multiple Choice

The auditor's primary concern in performing audit procedures of the write-off of uncollectible accounts relates to the risk that the client writes off customer accounts that have already been collected. The primary control for preventing this fraud is

• A) examining authorized credit memos.
• B) examining the uncollectible account authorization form.
• C) examining debit memos.
• D) examining the vouchers payable register.

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Definitions:

Book Value

The net value of a company's assets, determined by subtracting its liabilities from its total assets, often used to assess the company's worth.

Common Stock

A type of equity security that represents ownership in a corporation, with voting rights and potential for dividends.

Preferred Stock

A class of ownership in a corporation that has a higher claim on assets and earnings than common stock, often with fixed dividends.

Common Stock

A type of equity security that represents ownership in a corporation, with rights to vote on corporate matters and receive dividends.