Which of the Following Substantive Procedures Would Auditors Not Ordinarily

question 26

Multiple Choice

Which of the following substantive procedures would auditors not ordinarily use in evaluating the potential existence of subsequent events?

• A) Reviewing the latest interim financial statements.
• B) Performing cutoff testing near year-end.
• C) Inquiring of officers and other client executives.
• D) Obtaining written representations.

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Definitions:

Long Run

A period in economics during which all factors of production and costs are variable, allowing full adjustment to any change in the economic environment.

Break-Even Point

This is the point at which total revenues equal total costs, and the business or project makes neither a profit nor a loss.

Firm's Output

The quantity of goods or services produced by a firm within a given time period.

Short Run

A period in economics where at least one factor of production is fixed and cannot be changed.