Ajax, Inc, Is an Affiliate of Borax, Inc

Multiple Choice

Ajax, Inc., is an affiliate of Borax, Inc. and is audited by another audit firm. Which of the following is most likely to be used by the auditor of Borax to obtain assurance that all guarantees by Borax of Ajax's indebtedness have been detected?

A) Send the standard bank confirmation request to all of Borax's lender banks.
B) Review Borax board minutes and obtain a representation letter.
C) Examine supporting documents for all entries in intercompany accounts.
D) Obtain written confirmation of indebtedness from the auditor of Ajax.