During the Initial Planning Phase of an Audit, a CPA

question 50

Multiple Choice

During the initial planning phase of an audit, a CPA most likely would:

• A)identify specific internal control activities that are likely to prevent fraud.
• B)evaluate the reasonableness of the client's accounting estimates.
• C)discuss the timing of the audit procedures with the client's management.
• D)inquire of the client's attorney as to any unrecorded claims.

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Definitions:

Down Payment

An initial payment made when something is bought on credit, often expressed as a percentage of the total purchase price.

Buy Down

A financing technique where points are paid upfront by a borrower to reduce the interest rate on a loan.

Point Purchased

In finance, particularly in mortgage contexts, this refers to prepaid interest that the borrower opts to pay upfront in order to lower the interest rate on the loan.

Monthly Mortgage

A regularly scheduled payment that often includes both interest and principal, made by a borrower to a lender for the repayment of a home loan.