Which One of the Following Was NOT a Finding in the Pacific

question 16

Multiple Choice

Which one of the following was NOT a finding in the Pacific Acceptance case?

• A) The auditors were entitled to rely on management representations.
• B) Certain discoveries should have been communicated by the auditors to the board of directors.
• C) Audit programs should be updated each year.
• D) The auditors failed to use appropriate vouching procedures.

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Definitions:

Return On Equity

A profitability measure that calculates the amount of net income returned as a percentage of shareholders' equity.

Earnings Per Share

A measure of a company's profitability that calculates the portion of a company’s profit allocated to each outstanding share of common stock.

Earnings Per Share

A measure of a company's profitability calculated by dividing its net earnings by the number of outstanding shares.

Price-Earnings Ratio

A valuation ratio for a company calculated by dividing its current share price by its earnings per share, indicating the dollar amount an investor can expect to invest in a company in order to receive one dollar of that company's earnings.