An Entity's Procurement System Ends with the Assumption of a Liability

question 7

Multiple Choice

An entity's procurement system ends with the assumption of a liability and the eventual payment of the liability. Which of the following best describes the auditor's primary concern with respect to liabilities resulting from the procurement system?

• A)Accounts payable are not materially understated.
• B)Authority to incur liabilities is restricted to one designated person.
• C)Acquisition of materials is not made from one vendor or one group of vendors.
• D)Commitments for all purchases are made only after established competitive bidding procedures are followed.

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Definitions:

Deferred Imitation

A cognitive behavior observed in children, where they are able to replicate an action after a delay, demonstrating memory and understanding of the behavior.

Dynamic Systems

A conceptual framework in several scientific fields for understanding how complex behaviors emerge through interactions within and between systems over time.

Metacognitive Systems

Cognitive systems that involve understanding and controlling one's own learning and thought processes.

Take Care

A phrase used to express concern for someone's well-being, often used when parting.