An auditor testing long-term investments would ordinarily use analytical review as the primary audit procedure to ascertain the reasonableness of the:

Question

Quizplus · Accepted Answer

Choice "C" is correct. Analytical review is generally used to ascertain the reasonableness of investment income in relationship to the amount invested. Choice "A" is incorrect. Valuation would be verified using listed prices (NYSE, etc.). Choice "B" is incorrect. Classification of gains or losses would be evaluated based upon appropriate accounting principles. Choice "D" is incorrect. Existence and ownership is generally evaluated by inspection of securities, review of brokerage statements, or confirmation with an outside independent custodian.

An Auditor Testing Long-Term Investments Would Ordinarily Use Analytical Review