Which of the Following Procedures Is an Auditor Most Likely

question 43

Multiple Choice

Which of the following procedures is an auditor most likely to perform in searching for unrecorded payables?

• A)Reconcile receiving reports with related cash payments made just prior to year-end.
• B)Compare the ratio of accounts payable to purchases with the prior year's ratio.
• C)Vouch a sample of creditor balances to supporting invoices,receiving reports,and purchase orders.
• D)Compare cash payments occurring after the balance sheet date with the accounts payable trial balance.

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Definitions:

Dividends

Payments made by a corporation to its shareholder members, distributing a portion of the company's earnings.

Cost of Equity

The return a company requires to decide if an investment meets capital return requirements and can be seen as the opportunity cost of investing capital elsewhere.

Dividend Growth Model

A model used to estimate the value of a dividend-paying stock, based on the assumption that dividends will continue to grow at a constant rate.

Estimated Growth Rate

The projected rate at which a company, economy, or investment is expected to grow.