When Auditing Financial Instruments

question 13

Multiple Choice

When auditing financial instruments,

• A) the auditor usually performs more extensive substantive testing to reduce reliance on controls.
• B) analytical procedures are critical in assessing the year-end balances for financial instruments.
• C) the auditor relies on statements and broker's advices from investment managers to test purchases and sales as long as controls were deemed effective.
• D) tests of transactions are generally not performed.

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Definitions:

Digital Bits

The smallest unit of data in computing and digital communications, representing a binary value of 0 or 1.

Digitizer

A device or component that converts analog signals into digital form, often used in screens to detect touch inputs.

MIDI

Musical Instrument Digital Interface, a protocol designed for recording and playing back music on digital synthesizers.

Synthesized Music

Music created or modified by electronic devices or software through the manipulation of sound waves, enabling the production of new sounds and textures.