In Order to Perform a Review of Interim Financial Information,the

question 38

Multiple Choice

In order to perform a review of interim financial information,the auditor must

• A)have audited or be in the process of auditing the entity's latest financial statements.
• B)tested the entity's internal controls to determine that financial information is reliable.
• C)sent confirmation to third-parties concerning significant related-party transactions.
• D)established sufficient criteria to form an opinion on the fair presentation of the financial information.

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Definitions:

Debt Securities

Financial instruments representing money borrowed that must be repaid, with terms defining the interest rate and maturity date.

Equity Securities

Financial instruments that represent ownership in a company, such as stocks, granting holders a claim on the company's assets and earnings.

Financial Assets

Assets that derive value because of a contractual claim, such as stocks, bonds, bank deposits, and other investments.

Derivative Securities

Financial instruments whose value is derived from the value of an underlying asset, such as futures, options, and swaps.