Which of the Following Audit Procedures Is Least Likely to Detect

question 34

Multiple Choice

Which of the following audit procedures is least likely to detect an unrecorded liability?

• A)Analysis and recomputation of interest expense.
• B)Analysis and recomputation of depreciation expense.
• C)Mailing of standard bank confirmation forms.
• D)Reading of the minutes of meetings of the board of directors.

---

Definitions:

Money Rate

Typically refers to the interest rate, which is the cost of borrowing money, or the return on investing money, expressed as a percentage.

Real Rate

The interest rate adjusted for inflation, reflecting the real cost of funds to the borrower and the real yield to the lender.

Inflationary Premium

The part of the total interest rate that represents compensation to the lender for the expected loss of purchasing power due to inflation.

Investments

Investments refer to the allocation of money into assets with the expectation of generating income or profit in the future.