Which of the Following Is Not an Audit Challenge Relevant

question 72

Multiple Choice

Which of the following is not an audit challenge relevant to fair value estimation of Level 1,2,and 3 assets?

• A)Determining identical assets and active markets.
• B)Assessing client methodology and cash flows to originally estimate value.
• C)Determining appropriate model and inputs expected cash flows.
• D)Determining similar assets and relevant markets.

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Definitions:

Common Stock

A form of corporate equity ownership, a type of security that represents ownership in a corporation and gives holders voting rights and a share in the company's profits through dividends.

Fair Value Method

An accounting approach where assets and liabilities are valued based on current market prices.

Reported Net Income

The total earnings of a company after all expenses and taxes have been deducted from revenue, as presented in financial statements.

Dividends

Payments made by a corporation to its shareholder members, distributing a portion of the company's earnings as decided by the board of directors.