An Auditor Wishes to Perform Tests of Controls on a Client's

question 123

Multiple Choice

An auditor wishes to perform tests of controls on a client's purchasing procedures.If the control activities leave no audit trail of documentary evidence,the auditor most likely will test the procedures by

• A)Confirmation and observation.
• B)Observation and inquiry.
• C)Analytical procedures and confirmation.
• D)Inquiry and analytical procedures.

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Definitions:

Encumbrances

Legal claims or liabilities on property or assets that may affect their use or transferability, such as mortgages or liens.

Obligation

A legal or moral commitment to perform or refrain from performing some action.

Commission

A fee paid to an agent or employee for facilitating a sale or service.

Real Estate Agent

A licensed professional who represents buyers or sellers in real estate transactions.