Which of the Following Procedures Would Not Be Used to Obtain

question 24

Multiple Choice

Which of the following procedures would not be used to obtain an understanding of the entity and its environment?

• A)Observe entity operations.
• B)Re-perform entity processes.
• C)Verify proper evaluation of inventory subject to technological obsolescence.
• D)Review prior year's audit documentation.

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Definitions:

Government

The organization or system through which a society or community is governed, often responsible for making and enforcing laws, and providing services to its citizens.

Accrued Interest

The interest that has accumulated on a bond, loan, or other financial instrument but has not yet been paid to the lender or investor.

Loan Payment

A payment made towards a loan that may include both principal and interest components.

Bank Loan

A sum of money lent by a bank to a borrower at a defined interest rate for a specified period.