An Auditor Is Not Required to Tell the Reader of an Audit

question 50

True/False

An auditor is not required to tell the reader of an audit report when there has been a change in accounting principles that materially affects the financial statements.

---

Definitions:

Pure Endowment

An insurance policy where the insurer agrees to pay a specified sum of money at the end of a determined period on the condition that the insured is still alive.

Quasi-Endowment

Funds that are not permanently restricted under the terms of the gift but are designated by the governing board to function as an endowment, thus not easily expendable for general operations.

Liquid Assets

Assets that can be quickly and easily converted into cash without significantly affecting their value.

Financial Ratios

Quantitative measures derived from a business's financial statements, used to evaluate its performance, liquidity, and financial health.