If More Than One Component Auditor Was Used to Audit

question 83

Multiple Choice

If more than one component auditor was used to audit multiple subsidiaries, _______.

• A)then the audit report should not be relied upon
• B)then the portion of the client audited by all component auditors can be aggregated together and expressed as one-dollar amount or percentage
• C)then the portion of the client audited by all prior auditors can be aggregated together and expressed as one-dollar amount or percentage
• D)control risk will increase accordingly

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Definitions:

Realized Gain

The profit made from the sale of an asset or investment when it is actually sold, not just on paper.

Available-for-sale Securities

Financial assets that are intended to be sold before they reach maturity or are needed to fund specific obligations.

Interest Revenue

Income earned on investments, loans, and other interest-bearing financial instruments, recorded as revenue in the income statement.

Debt Trading Securities

Financial instruments that involve debt and are actively bought and sold on markets with the aim to profit from price movements.