Which of the Following Are Examples of Substantive Procedures in Auditing

question 37

Multiple Choice

Which of the following are examples of substantive procedures in auditing revenue that are always performed?

• A) testing the cut-off of revenues
• B) comparing the monthly income statements to budget and investigating any unexpected fluctuations
• C) both a and b
• D) none of the above

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Definitions:

Net Income

The total revenue minus total expenses, indicating the profit earned by a business during a specific period.

Operating Activities

Activities related to the primary operations of a business, such as sales, supply chain management, and customer service.

Indirect Method

A method used in cash flow statement preparation that adjusts net income for changes in balance sheet accounts to convert it from accrual to cash basis.

Net Income

The total profit of a company after subtracting all expenses, taxes, and costs from total revenue.