Your client is in the process of acquiring another company. You have been requested to verify that cash for the company being acquired is properly stated. The audit technique that will yield the most persuasive evidence is:
A)examination of the company's escrow account.
B)interview with the company's treasurer and cash manager.
C)preparation and review of standard bank confirmation inquiries.
D)analytical computations comparing current cash in the bank with previous accounting periods.

Question

Quizplus · Accepted Answer

Preparation and review of standard bank confirmation inquiries is the audit technique that would yield the most persuasive evidence while verifying the cash for the company being acquired. Bank confirmation is considered the most reliable form of evidence for cash balances, as it confirms the cash balances directly with the bank. It provides reliable evidence to ensure that the reported cash balance is accurate and free of any irregularities. Therefore, it is the most appropriate choice for verifying the cash balance of the company being acquired.

Your Client Is in the Process of Acquiring Another Company