Which of the following circumstances would most likely cause an audit team to perform extended procedures?
A) Supporting documents are produced when requested.
B) The client made several large adjustments at or near year-end.
C) The company has recently hired a new chief financial officer after the previous one retired.
D) The company maintains several different petty cash funds.

Question

Quizplus · Accepted Answer

Large adjustments made at or near year-end can indicate a higher risk of potential material misstatements in the financial statements. This would cause the audit team to perform extended procedures to ensure the accuracy and completeness of the financial information. The other choices do not necessarily indicate a need for extended procedures.

Which of the Following Circumstances Would Most Likely Cause an Audit