As One of the Year-End Audit Procedures, the Auditor Instructed

question 53

Multiple Choice

As one of the year-end audit procedures, the auditor instructed the entity's personnel to prepare a standard bank confirmation request for a bank account that had been closed during the year. After the entity's treasurer had signed the request, it was mailed to the bank by the assistant treasurer. What is the major flaw in this audit procedure?

• A)The confirmation request was signed by the treasurer.
• B)Sending the request was meaningless because the account was closed before the year-end.
• C)The request was mailed by the assistant treasurer.
• D)The CPA did not sign the confirmation request before it was mailed.

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Definitions:

Total Cost

The complete cost of production which includes both fixed and variable costs.

Profit Maximizes

The process or strategy of adjusting production and sales to achieve the highest possible profit.

Same Price

Indicates a situation where an item or service is offered for sale at an identical monetary value in different contexts or locations.

Monopolist

A single seller in a market who has significant control over the price and supply of a unique product or service.