When the Client Uses a Service Organization,the Auditor Obtains Evidence

question 2

Multiple Choice

When the client uses a service organization,the auditor obtains evidence by one or more of the following methods:

• A)obtain a report prepared by the auditor of the service organization that describes the service organization's system
• B)request the management of the service organization to perform test of controls at the direction of the auditor
• C)perform substantive tests of transactions at the service organization
• D)perform tests of the client's controls over the activities performed by the service organization

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Definitions:

Debenture

A type of debt instrument unsecured by collateral, relying on the creditworthiness and reputation of the issuer for security.

Chattel Mortgage

A loan agreement where personal movable property is used as collateral for the loan.

Advanced Widget Press

A sophisticated machine or equipment used for producing widgets with advanced features or capabilities.

Caveat Emptor

A Latin phrase meaning "let the buyer beware," which suggests that the buyer is responsible for checking the quality and suitability of goods before a purchase is made.