Which of the Following Procedures Should an Accountant Perform During

question 2

Multiple Choice

Which of the following procedures should an accountant perform during an engagement to review the financial statements of a private company?

• A)Communicate internal control system weaknesses that were discovered during the assessment of control risk.
• B)Obtain a letter of representation signed by top-level management.
• C)Send bank confirmations to the company's financial institutions.
• D)Examine cash disbursements in the subsequent period for evidence of unrecorded liabilities.

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Definitions:

Work Sheet

An informal document used by accountants to organize and summarize financial data for the preparation of financial statements.

Financial Statements

Concise financial records that encapsulate a company's financial performance, position, and cash flows over a specific period.

Expense Account

A category within accounting that tracks money spent or costs incurred by a business in its operational activities.

Income Summary

An account used temporarily during the closing process to aggregate all income and expense accounts before transferring their balances to the retained earnings account.