Tracing Is a Specific Type of Document Inspection Whereby the Auditor

question 53

Multiple Choice

Tracing is a specific type of document inspection whereby the auditor verifies whether the document:

• A) has been posted to the relevant accounting records.
• B) is supported by appropriate source documents.
• C) is mathematically accurate.
• D) proves ownership of the underlying asset or liability.

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Definitions:

Improper Filing

The submission of legal or official documents in a manner that does not comply with prescribed requirements or regulations.

Unperfected

Refers to a security interest or lien that has not been properly recorded or filed according to law, thus not fully enforceable against third parties.

Secured Transaction

A secured transaction involves a security interest in personal property, which serves as collateral for repayment of a debt or performance of an obligation.

Personal Property

Items of property that are not attached to real estate, such as vehicles, furniture, and electronics.