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 purchase 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 specific procedure performed for the purpose of discovering subsequent events, as opposed to a procedure normally integrated as part of the verification of year-end account balances. The other options listed (B, C, and D) are all procedures that can be integrated as part of the verification of year-end account balances.

The Audit Procedures for the Subsequent Events Review Can Be