Which of the Following Is Not a Substantive Audit Procedure

question 21

Multiple Choice

Which of the following is not a substantive audit procedure for leases?

• A)Obtain and read copies of lease agreements and develop a schedule of leases.
• B)Review relevant expense accounts and determine if there are entries related to leases.
• C)For all operating leases,determine that the client has recorded assets and lease obligations properly.
• D)Review the client's disclosure of lease obligations for compliance with GAAP.

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Definitions:

Wealth Effect

The phenomenon where consumers spend more as the value of their assets, such as real estate or stocks, increases.

Interest-Rate Effect

The impact that changing interest rates have on consumer spending and capital investment in the economy.

Exchange-Rate Effect

The impact of a change in the relative value of a currency on the economy, particularly on foreign exchange rates and international trade.

Monetary Policy

The process by which a central authority, typically a country's central bank, controls the supply of money in the economy, often targeting an inflation rate or interest rate to ensure economic stability and growth.