The Auditor Performs a Review of Systems Documentation

question 61

Multiple Choice

The auditor performs a review of systems documentation

• A) during the initial audit phase.
• B) throughout the audit at the beginning of each audit phase.
• C) during the intermediate phase, after becoming familiar with the basic approach to be taken.
• D) during the final audit phase, giving the auditor a chance to first become familiar with all of the company's operations.

---

Definitions:

Liquid Accounts

Refers to financial accounts which hold assets that can be readily converted into cash, often with little to no loss in value, such as savings accounts or money market accounts.

Profitability Ratios

Financial metrics used to evaluate a company's ability to generate profit relative to its revenue, assets, equity, or other financial metrics.

Net Income

The total profit of a company after all expenses and taxes have been deducted from total revenues; also known as net earnings or net profit.

Equity

Represents the shareholder's ownership interest in a company, calculated as the difference between total assets and total liabilities.