An Auditor Wishes to Perform Tests of Controls on a Client's

question 39

Multiple Choice

An auditor wishes to perform tests of controls on a client's cash disbursements relating to accounts payable.If the control procedures leave no audit trail of documentary evidence,the auditor most likely will test the procedures by:

• A)Confirmation and observation.
• B)Observation and inquiry.
• C)Analytical procedures and confirmation.
• D)Inquiry and analytical procedures.

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Definitions:

Perfection

In legal and financial contexts, it often relates to the process of securing a security interest in collateral, ensuring priority over other claims.

Financing Statement

A document filed by a creditor to indicate a security interest in the property of a debtor, used in securing loan agreements.

Perfection

In legal and finance contexts, the act of securing a priority interest in collateral to protect a secured loan or transaction.

Certificate of Deposit

A savings certificate entitling the bearer to receive interest, which has a fixed maturity date, and typically restricts withdrawal of funds before that date.