question archive a) If the company has not fully complied with the requirements of debt covenants, auditors should inform the company's creditors
a) If the company has not fully complied with the requirements of debt covenants, auditors should inform the company's creditors
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a) If the company has not fully complied with the requirements of debt covenants, auditors should inform the company's creditors.
True or False
b) All changes in the capital stock accounts should receive formal advance approval of the chief executive officer or president of the corporation.
True or False
c. Testing of internal controls over long-term debt is mostly accomplished through duel-purpose transaction testing.
True or False
d. Companies that act as their own stock registrar/transfer agent will normally require all of the following audit procedures except:
- Confirmation of the number of shares owned with each shareholder.
- Reconciliation of the general control account, stockholders' ledger, and stock certificate book.
- Examination of all canceled stock certificates on hand including those voided.
- Inspection of the unissued certificates to determine that all are on hand and blank
e. Confirmations of financing agreements should be signed and mailed by the client to the client's loan officer or another official of the financial institution.
True or False
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a) False
Where in the course of audit the auditor finds any deviations, it should be notified through the Audit Report. Auditor is at no duty to directly inform the creditors.
b) False
Mostly, Changes in Capital stock Accounts is also passed through a resolutions in the meeting of members.
c) True
Its a combination of test of control and substantive test, that evaluates the effectiveness of internal control.
d) Confirmation of the number of shares owned with each shareholder.
e) False
Such mode of obtaining external confirmations are not reliable as these are initiated by the client, auditor should himself directly approach the financial institution to obtain confirmations.
