In Auditing Related Party Transactions, an Auditor Ordinarily Places Primary

question 25

Multiple Choice

In auditing related party transactions, an auditor ordinarily places primary emphasis on:

• A)the probability that related party transactions will recur.
• B)confirming the existence of the related parties.
• C)verifying the valuation of the related party transactions.
• D)the adequacy of the disclosure of the related party transactions.

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Definitions:

Deposits In Transit

Funds that have been received and recorded by a business but not yet by its bank, typically relating to bank reconciliation processes.

Purchase Order

A formal document sent from a buyer to a seller to initiate the purchase of products or services with specified terms.

Vendor

An individual or company that sells goods or services to another entity, typically within a supply chain.

Petty Cash

A small amount of cash kept on hand for making immediate payments for miscellaneous small expenses in an office or business.