Of the Following,which Is the Most Important Procedure That an Auditor

question 52

Multiple Choice

Of the following,which is the most important procedure that an auditor should use when making an overall review of the income statement?

• A) Select sales and expense items and trace amounts to related supporting documents.
• B) Compare actual revenues and expenses with the corresponding figures of the previous year and investigate significant differences.
• C) Obtain, from the proper client representative, inventory certificates for the beginning and ending inventory amounts that were used to determine cost of sales.
• D) Ascertain that the net income amount in the statement of cash flows agrees with the net income amount in the income statement.

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Definitions:

Intemperance

The lack of moderation or restraint, often particularly related to the excessive consumption of alcohol or indulgence in other physical pleasures.

Genuine Enthusiasm

Authentic and sincere excitement or interest in a subject or activity.

Sense of Purpose

The feeling of having a clear focus, goal, or objective that gives meaning to one's actions.

Innate Competency

Innate competency refers to natural abilities or talents that an individual possesses without the need for formal training or education.