Which of the Following Might an Auditor Do in Testing

question 45

Multiple Choice

Which of the following might an auditor do in testing for the existence of accounts payable?

• A)Review client's financial statement disclosure.
• B)Review long-term purchase commitments.
• C)Perform a cutoff test of purchases and cash disbursements.
• D)Perform analytical review of related expense accounts.

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Definitions:

Breach of Contract

The failure to perform as specified in a contract without a legitimate legal excuse.

Statute of Frauds

A legal concept that requires certain types of contracts to be executed in writing and signed by the party to be charged, in order to be enforceable.

Promissory Estoppel

Promissory estoppel is a legal doctrine that enforces a promise made when the promisee has relied on that promise to their detriment, even if a formal contract does not exist.

Good-Faith Reliance

Acting based on the honest belief or trust in the legitimacy or accuracy of something.