In Searching for Unrecorded Liabilities, the Purpose of the Audit

question 8

Multiple Choice

In searching for unrecorded liabilities, the purpose of the audit procedure to "examine underlying documentation for subsequent cash disbursements" is to

• A) uncover liabilities on the balance sheet which should not have been recorded until a subsequent period.
• B) find the documentation relating to a cash disbursement.
• C) uncover payments made in a subsequent accounting period for liabilities that existed at the balance sheet date.
• D) uncover cash disbursements recorded in a subsequent accounting period which should be recorded in this period.

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Definitions:

Quantitative Approaches

Methods that focus on obtaining and analyzing numerical data for the purpose of making decisions or understanding patterns.

Computer Technology

The study and application of the design, construction, and use of computers and software for processing and managing information.

Managerial Problem Solving

The process by which managers identify, assess, and resolve issues impacting their organization's operations or objectives effectively.

Behavioural Approach

A management perspective focusing on the actions and behaviors of individuals in organizations, aiming to improve productivity and satisfaction.