Which of the Following Is a True Statement About an Auditor's

question 54

Multiple Choice

Which of the following is a true statement about an auditor's evaluation of an accounting system?

• A) If a company has a haphazard accounting system then the auditor has greater confidence that the financial statements are reliable.
• B) If a company has an efficient and orderly accounting system then the auditor has greater confidence that the financial statements are reliable.
• C) If a company has an efficient and orderly accounting system then the auditor must do more detailed work to verify that the financial statements are reliable.
• D) None of these are correct.

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Definitions:

Trustee in Bankruptcy

An individual or entity appointed to oversee and administer the estate of a bankrupt entity to ensure fair distribution of assets to creditors.

Default

Failure to fulfill a legal obligation, especially failing to make required payments on a loan.

Secure Transaction

A transaction that is safeguarded through the use of security measures to prevent unauthorized access, ensuring the integrity and confidentiality of the data exchanged.

Private Agreements

Contracts or understandings between individuals or entities that are not subject to public disclosure.