Which of the Following Questions Is an Auditor Most Likely

question 6

Multiple Choice

Which of the following questions is an auditor most likely to include on an internal control questionnaire for notes and loans payable?

• A)Are the assets that secure notes payable critically needed for the entity's continued existence?
• B)Are two or more authorized signatures required on cheques that repay notes payable?
• C)Are the proceeds from notes payable used for the purchase of non-current assets?
• D)Are direct borrowings on notes payable authorized by the board of directors?

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Definitions:

Piaget

Refers to Jean Piaget, a Swiss psychologist known for his pioneering work in child development and his theory of cognitive development.

Cognitive Development

The formation and evolution of mental processes like recall, solving problems, and making choices, from early childhood, through the teen years, into maturity.

Egocentrism

The inability to differentiate between one's own perspective and someone else's perspective, often seen in early childhood development.

Animism

The belief that objects, places, and creatures all possess a distinct spiritual essence, prevalent in many indigenous religions.