Ajax,Inc.,is an affiliate of the audit client and is audited by another audit firm.Which of the following is most likely to be used by the auditor to obtain assurance that all guarantees by the client of the affiliate's indebtedness have been detected?
A) Send the standard bank confirmation request to all the client's lender banks.
B) Review client minutes and obtain a representation letter.
C) Examine supporting documents for all entries in intercompany accounts.
D) Obtain written confirmation of indebtedness from the auditor of the affiliate.

Question

Quizplus · Accepted Answer

Reviewing client minutes and obtaining a representation letter can help the auditor identify any guarantees made by the client, as these are likely to be discussed in meetings and acknowledged in representations.

Ajax,Inc,Is an Affiliate of the Audit Client and Is Audited