Some objectives of an audit related to mutual funds might include determining that:
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A. B. C. D.D
An audit related to mutual funds is an independent review of the financial records and operations of a mutual fund to provide assurance that the financial statements are accurate and in compliance with relevant laws and regulations. The objective of the audit is to obtain reasonable assurance that the financial statements of the mutual fund are free of material misstatement.
The options listed in the question are the possible objectives of an audit related to mutual funds. Let's review each option in detail:
A. Mutual fund checks are issued in accordance with firm policies and supported by valid trades: This objective ensures that the mutual fund checks issued by the firm are in accordance with the policies and procedures set forth by the firm, and are supported by valid trades. This helps to prevent fraud and ensure that the mutual fund's assets are being used in accordance with the fund's investment objectives.
B. Mutual fund purchases are confirmed on a timely basis: This objective ensures that the mutual fund purchases are confirmed in a timely manner, which helps to prevent errors and unauthorized transactions. Timely confirmation also helps to ensure that the mutual fund's assets are invested in accordance with the fund's investment objectives.
C. Mutual fund switches are not authorized by the client: This option is incorrect because it is not an objective of the audit related to mutual funds. Mutual fund switches are authorized transactions that allow investors to switch their investments between different mutual funds. The decision to switch mutual funds is made by the investor, not the client.
D. All EXCEPT "C": This option correctly identifies the possible objectives of an audit related to mutual funds, with the exception of option C. The objectives listed in options A and B are important in ensuring that the mutual fund's assets are being managed in accordance with the fund's investment objectives and that the financial statements are accurate and in compliance with relevant laws and regulations.
In summary, the correct answer is A. Mutual fund checks are issued in accordance with firm policies and supported by valid trades, and B. Mutual fund purchases are confirmed on a timely basis.