Gina is performing the audit of the payables section of Reno Inc.She wants to confirm the payables from an independent source.Which of the following actions would achieve this?
A)Confirm an interco payable with the CEO of the US branch of Reno Inc.
B)Confirm the account payable with Clarkson Corp.The CFO of Clarkson is the wife of the controller of Reno.
C)Confirm the line of credit balance with Citizen Bank.Reno does all its banking with Citizen and it also has a long-term loan there.
D)Confirm the account payable to Suco Inc.The CEO of Reno owns 30% of the outstanding shares of Suco.

Question

Quizplus · Accepted Answer

Confirming the line of credit balance with Citizen Bank would provide an independent source of information for the payables section as Reno does all its banking with Citizen and it also has a long-term loan there. This confirms the existence of the payables from an independent source. Option A, B and D involve related parties, which are not independent sources.

Gina Is Performing the Audit of the Payables Section of Reno