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

question 7

Multiple Choice

An auditor wants to perform tests of controls on a client's cash disbursement procedures.If the control procedures leave no audit trail or documentary evidence,the auditor is most likely to 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:

Call Option

A financial contract giving the buyer the right, but not the obligation, to purchase an asset at a specified price within a particular time frame.

Option Contract

A financial contract that gives the buyer the right, but not the obligation, to buy or sell an asset at a specified price on or before a specific date.

Exercise Price

The set price at which an option's owner has the right to purchase (for a call option) or sell (for a put option) the underlying asset or commodity.

Call Option

A financial contract that gives the buyer the right, but not the obligation, to buy an asset at a specified price within a specific time period.