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:

Compounded Annually

Describes the method where the interest earned in one period is added to the principal sum, and the total becomes the basis for calculating interest in the next period, done once a year.

Start Business

The process of establishing a new enterprise or venture, involving planning, financing, and legal considerations.

Rate Of Return

The rate of return is a percentage that shows the amount of return an investment gives back to an investor compared to its cost.

Retirement Date

The specific date on which an individual decides to leave the workforce permanently, ceasing employment and often beginning to withdraw from retirement savings.