During an Audit of an Entity's Stockholders' Equity Accounts, the Auditor

question 23

Multiple Choice

During an audit of an entity's stockholders' equity accounts, the auditor determines whether there are restrictions on retained earnings resulting from loans, agreements, or state law. This audit procedure most likely is intended to verify management's assertion:

• A)existence or occurrence.
• B)completeness.
• C)valuation or allocation.
• D)presentation and disclosure.

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Definitions:

Internal Auditors

Professionals who perform audits within an organization to assess the effectiveness of its risk management, control, and governance processes.

Employee Collusion

When two or more employees work together secretly and deceitfully to commit fraud or theft against their employer, often undermining the employer's interests.

Internal Control

Procedures and policies implemented by a company to ensure the integrity of financial and accounting information, promote accountability, and prevent fraud.

Signature Card

A document that a bank keeps on file with the signatures of all the authorized signatories for an account.