The audit procedures for the subsequent events review can be divided into two categories: ? (1)procedures normally 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 the second category?
A)Correspond with attorneys.
B)Test the collectability of accounts receivable by reviewing subsequent period cash receipts.
C)Subsequent period sales and purchases transactions are examined to determine whether the cutoff is accurate.
D)Compare the subsequent-period purchase price of inventory with the recorded cost as a test of lower of cost or market valuation.

Question

Quizplus · Accepted Answer

Corresponding with attorneys is a procedure specifically performed for the purpose of discovering subsequent events, such as legal proceedings, claims, and assessments that may have arisen since the balance sheet date. The other options are procedures normally integrated as a part of the verification of year-end account balances, such as testing the collectability of accounts receivable, examining subsequent period sales and purchases transactions, and comparing the subsequent-period purchase price of inventory with the recorded cost.

The Audit Procedures for the Subsequent Events Review Can Be