Which of the Following Audit Procedures Is Best for Identifying

question 69

Multiple Choice

Which of the following audit procedures is best for identifying unrecorded accounts payable?

• A)Reviewing cash disbursements recorded subsequent to the balance sheet date to determine whether the related payables apply to the prior period.
• B)Investigating payables recorded just prior to and just subsequent to the balance sheet date to determine whether they are supported by receiving reports
• C)Examining unusual relationships between monthly accounts payable balances and recorded cash payments
• D)Reconciling vendors' statements to the file of receiving reports to identify items received just prior to the balance sheet date

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Definitions:

Macroeconomic Risks

Considered broad economic or political uncertainties that could affect the performance of financial markets and investments globally.

Security Selection

The process of choosing individual securities for investment with the goal of achieving the best possible return for a given level of risk.

Passive Strategy

A portfolio decision that avoids any direct or indirect security analysis. See passive management.

Index Funds

Investment funds designed to replicate and track the components of a market index.