ASA 300 Requires an Auditor to Gain a Reasonable Understanding

question 65

Multiple Choice

ASA 300 requires an auditor to gain a reasonable understanding of the client's:

• A) business and industry.
• B) industry but not business.
• C) business but not industry.
• D) specific entity structure but not its business or industry.

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Definitions:

Relative and Absolute Terms

Concepts used to compare differences in terms of relationships or ratios (relative) and fixed values or units (absolute).

Social Security

A government system that provides monetary assistance to people with an inadequate or no income, particularly the elderly, disabled, and families with dependent children.

Workers

Individuals engaged in a task or activity, especially for earning wages or a salary.

Income Earners

Individuals or entities that receive earnings from work, investments, or other sources.