Michael Fernandez Has Decided to Perform Substantive Procedures at a Major

question 73

Multiple Choice

Michael Fernandez has decided to perform substantive procedures at a major retailer. Which one of the following is not a substantive procedure?

• A) re-performing control procedures to test their effectiveness
• B) inspecting documents to verify the dates of the transactions
• C) bank confirmations regarding interest rates on borrowings by client
• D) recalculating an interest expense using confirmed interest rates

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Definitions:

Edmonton

The capital city of Alberta, Canada, known for its cultural, governmental, and educational institutions.

Calgary

A city in the Canadian province of Alberta, known for its high quality of life and as a center for Canada's oil industry.

Invitation to Treat

An indication by a person that they are prepared to negotiate the terms of an offer, but it is not in itself an offer that can be accepted to form a contract.

Option Agreement

A contract granting a party the right, but not the obligation, to buy, sell, or engage in a specific transaction at agreed terms within a specified time.