When Preparing a Record of a Client's Internal Control,the Independent

question 64

Multiple Choice

When preparing a record of a client's internal control,the independent auditor sometimes uses a systems flowchart,which can best be described as a

• A) Pictorial presentation of the flow of instructions in a client's internal computer system.
• B) Diagram which clearly indicates an organization's internal reporting structure.
• C) Graphic illustration of the flow of operations which is used to replace the auditor's internal control questionnaire.
• D) Symbolic representation of a system or series of sequential processes.

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Definitions:

Long-term Capital Gains

Profits from the sale of an asset held for more than a year, generally taxed at lower rates than ordinary income.

Ordinary Income

Income earned from providing services or the sale of goods, typically subject to standard tax rates, as opposed to income classified as capital gains.

Equipment Distribution

The process of supplying equipment to various departments or locations within an organization or among individuals.

Cash Distributions

Payments made in cash by a corporation to its shareholders, typically from earnings or profits.