During the Year Under Audit,a Company Has Completed a Private

question 22

Multiple Choice

During the year under audit,a company has completed a private placement of a substantial amount of bonds.Which of the following is the most important step in the auditor's program for the audit of bonds payable?

• A) Confirming the interest rate with the bond trustee.
• B) Tracing the cash received from the issue to the accounting records.
• C) Examining the bond agreement for a sinking fund provision.
• D) Recomputing the annual interest cost and the effective yield.

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Definitions:

Ethical Lapse

A temporary failure to maintain ethical standards, resulting in behavior that is morally wrong or violates company policies.

Transparency

The practice of being open, honest, and straightforward about various aspects of a business or project.

Social Media

Platforms and technologies that enable users to create, share content, and participate in social networking online.

Consumers

Individuals or groups who purchase goods and services for personal use.