When an Audit Is Made in Accordance with the Auditing

question 23

Multiple Choice

When an audit is made in accordance with the auditing standards, the independent auditor must:

• A)utilise statistical sampling.
• B)confirm receivables at year-end.
• C)obtain certain written representations from management.
• D)sight all fixed assets on the balance date.

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Definitions:

Accounts Receivable

Accounts receivable represents money owed to a company by customers for products or services delivered but not yet paid for.

Operating Activities

Activities that relate to a company’s primary business operations, including revenue and expense transactions affecting net income.

Interest

The cost of borrowing money, typically expressed as an annual percentage of the principal loan amount.

Long-Term Bank Loan

A debt financing obligation issued by a bank or financial institution to a company, with a repayment period exceeding one year.