The Auditor Has Considerable Responsibility for Notifying Users as to Whether

question 81

Multiple Choice

The auditor has considerable responsibility for notifying users as to whether or not the statements are properly stated. This imposes on the auditor a duty to:

• A) be an insurer of the fairness of the statements.
• B) provide reasonable assurance that material misstatements will be detected.
• C) be a guarantor of the fairness of the statements.
• D) be equally responsible with management for the preparation of the financial statements.

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Definitions:

Master Budget

An inclusive financial planning document that consolidates all of a company’s individual budgets and plans for the upcoming fiscal period.

Production Budget

A financial plan that estimates the number of units that need to be manufactured to meet sales goals and inventory requirements.

Cash Budget

An estimate of cash inflows and outflows for a business or project over a specific period of time, used for managing liquidity and ensuring financial stability.

Cash Receipts

The total amount of money received by a company during a specific period, including all sources of income.