The Audit Procedures for the Subsequent Events Review Can Be

question 23

Multiple Choice

The audit procedures for the subsequent events review can be divided into two categories: (1) procedures integrated as a part of the verification of year-end account balances, and (2) those performed specifically for the purpose of discovering subsequent events. Which of the following procedures is in category 1?

• A) Inquiries of client regarding contingent liabilities.
• B) Obtain a letter of representation written by client.
• C) Subsequent period sales and purchases transactions are examined to determine whether the cutoff is accurate.
• D) Review journals and ledgers of year 2 to determine the existence of any transaction related to year 1.

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Definitions:

Necessary and Proper Clause

A provision in the U.S. Constitution granting Congress the power to pass all laws deemed necessary and proper for executing its enumerated powers.

Full Faith and Credit Clause

A constitutional mandate requiring states to recognize and respect the public records, judicial proceedings, and legislative acts of other states.

Brady Handgun Violence Prevention Act

Federal legislation that requires background checks on individuals before a firearm purchase to prevent firearms sales to prohibited buyers.

Supreme Court

The highest federal court in the United States, with ultimate appellate jurisdiction over all federal and state court cases involving points of federal law.