Which of the Following Audit Procedures Is Least Likely to Detect

question 49

Multiple Choice

Which of the following audit procedures is least likely to detect an unrecorded liability?

• A)Analysis and re-computation of depreciation expense.
• B)Analysis and re-computation of interest expense.
• C)Reading of the minutes of meetings of the board of directors.
• D)Analysis of response to a bank confirmation request.

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Definitions:

Finance Company

A business that makes loans to individuals and companies, aside from banks and other traditional lenders.

Service Fee

A charge added to a customer's bill for the provision of services by a company or professional.

ROEs

Return on Equity, a measure of a corporation's profitability that reveals how much profit a company generates with the money shareholders have invested.

Total Assets Turnover

A financial ratio that measures how effectively a company uses its total assets to generate sales revenue.