Question

1.

Which of the following confirmation requests would be least likely to be used?

Multiple Choice

• Confirming accounts receivable balances with customers.

• Confirming inventories on hand with warehouses.

• Confirming loan terms and amounts with lenders.

• Confirming authorization for major transactions with directors

2. Auditors will apply tests of details to accomplish which of the following?

Multiple Choice

• Compliance with generally accepted accounting principles.

• Evaluating the operating effectiveness of management’s policies and procedures.

• Detecting material misstatements affecting the financial statements.

• Determining whether or not the accounting system is reliable.!

Answer 1

Solution 1:

The confirmation request which is least likely to be used is "Confirming authorization for major transactions with directors"

Hence last option is correct.

Solution 2:

Auditors will apply tests of details to accomplish "Detecting material misstatements affecting the financial statements."

Hence 3rd option is correct.