Auditors Can Test Whether Dividend Payments Have Been Made to Shareholders

question 62

True/False

Auditors can test whether dividend payments have been made to shareholders by selecting a sample of recorded dividend payments and agreeing payee information on the cancelled check to the dividend records.

---

Definitions:

Discount Rate

The interest rate used to discount future cash flows to their present value, often reflecting the cost of capital or the risk of the investment.

Present Value

The present evaluation of a future cash sum or series of cash receipts, factoring in a certain rate of return for discounting.

Interest Rate

The sum a lender charges a borrower to use assets, conveyed as a percentage of the principal's amount.