The Statement That Best Expresses the Auditor's Responsibility with Respect

question 7

Multiple Choice

The statement that best expresses the auditor's responsibility with respect to events occurring between the balance sheet date and the end of his audit is that:

• A)The auditor has no responsibility for events occurring in the subsequent period unless these events affect transactions recorded on or before the balance sheet date.
• B)The auditor's responsibility is to determine that a proper cutoff has been made and that transactions recorded on or before the balance sheet date actually occurred.
• C)The auditor is fully responsible for events occurring in the subsequent period and should extend all detailed procedures through the last day of field work.
• D)The auditor is responsible for determining that a proper cutoff has been made and performing a general review of events occurring in the subsequent period.

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Definitions:

Creditor Accounts

Accounts payable to suppliers or lenders from whom a business has borrowed money or purchased goods on credit.

Accounts Payable Cr.

Accounts Payable Credit refers to the credit balance or entry in the accounts payable account, indicating the total amount the company owes to its suppliers or vendors.

Other Accounts

A general term for accounts on the balance sheet that may include miscellaneous expenses, revenues, assets, or liabilities not classified under standard account categories.

Computerized Accounting Systems

Software applications designed to manage and automate accounting transactions and tasks.