This year is the first time that, as a normal practice in a client's business, accounts receivable may be pledged, assigned, factored or sold at discount. The audit procedure which would disclose these practices would be:
A) a review of the minutes of the board of directors' meetings.
B) discussions with the client.
C) examination of correspondence files.
D) all of the above

Question

Quizplus · Accepted Answer

In order to accurately determine whether accounts receivable have been pledged, assigned, factored, or sold at a discount, all of the suggested audit procedures should be performed. A review of the board of directors' minutes may provide insight into the decision-making process behind these practices, discussions with the client can provide a firsthand account of any agreements that have been made, and examination of correspondence files may reveal any formal documentation of these practices. Therefore, the best choice is D.

This Year Is the First Time That, as a Normal