Which of the Following Procedures Would an Auditor Most Likely

question 53

Multiple Choice

Which of the following procedures would an auditor most likely include in the initial planning of an examination of financial statements?

• A)Assess the need for the use of specialists in the audit.
• B)Inquiring of the client's attorney as to any claims that are likely to be asserted.
• C)Perform detailed testing of the individual financial statement accounts.
• D)Determining whether necessary internal controls procedures are being applied as prescribed.

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Definitions:

Rebuttable Presumption

A legal assumption made by a court that is taken as true unless someone comes forward to contest it and prove otherwise.

Bailee

A person or entity temporarily holding property on behalf of another, under a bailment agreement, wherein the bailee is responsible for the safeguarding of the property.

Negligence

The failure to exercise the care that a reasonably prudent person would exercise in similar circumstances, leading to harm or damage.

Real Property

Land and anything permanently attached to it, such as buildings, also including rights and interests associated with the land.