Under the Cycle Approach,the Only Accounts That Have Two or More
Under the cycle approach,the only accounts that have two or more cycles associated with them are cash and accounts receivable.
Although auditors need to consider the interrelationships between cycles,they typically treat cycles independently to the extent practical to manage complex audits effectively.
When examining the relationships of the five cycles and general cash,the cycles have no beginning or end except at the origin or final disposition of the company.
Auditors have found that generally the most efficient and effective way to conduct audits is to:
A) obtain complete assurance about the correctness of each class of transactions affecting the account.
B) obtain some combination of assurance for each class of transactions and for the ending balance in the related accounts.
C) obtain assurance about the ending balance of the account only.
D) verify each entry that was made into an account.