Harvey, CPA, Is Preparing an Audit Program for the Purpose

question 28

Multiple Choice

Harvey, CPA, is preparing an audit program for the purpose of ascertaining the occurrence of subsequent events that may require adjustment or disclosure essential to a fair presentation of the financial statements in conformity with generally accepted accounting principles. Which one of the following procedures would be least appropriate for this purpose?

• A)Confirm, as of the completion of fieldwork, accounts receivable that have increased significantly from the year-end date.
• B)Read the minutes of the board of directors.
• C)Inquire of management concerning events that may have occurred.
• D)Ask legal counsel about any developments relating to litigation, claims, or assessments against the company.

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Definitions:

Human Resources

The department within an organization that manages recruitment, administration, and training of staff, as well as fostering a positive work environment.

Investment Activities

Actions undertaken by individuals or entities to allocate resources, often money, with the expectation of generating a future benefit or profit.

Goods and Services

The tangible products (goods) and intangible activities (services) that satisfy human wants or needs and are offered in the marketplace.

Man-Made Resources

Resources that have been created or modified by human action, as opposed to natural resources.