CAF-8 · Chapter 10 · Question 7 of 10
If a company pays a dividend during the year, the auditor must verify that the payment was properly authorized. Where would this authorization typically be found?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) In the minutes of the Board of Directors' meetings or the Annual General Meeting (AGM).
Explanation
Dividends are significant transactions that require formal approval by directors (interim) or shareholders (final), which is documented in the meeting minutes.
More Substantive Procedures: Other Areas MCQs
- Q9What is the primary responsibility of the auditor regarding a company's 'Going Concern' status?
- Q10Which of the following procedures specifically tests for 'Unrecorded' liabilities (Completeness)?
- Q1When auditing 'Provisions' (e.g., for a pending legal case), the auditor's primary concern under IAS 37 is whether:
- Q2An auditor is reviewing the 'Contingent Liabilities' of a company. A major lawsuit against the company is deemed 'Possible' but not…
- Q3To obtain evidence about a pending legal claim against the client, the auditor should primarily: