AU-C 540 Auditing Accounting Estimates, Including Fair Value Accounting Estimates

question 91

Multiple Choice

AU-C 540 Auditing Accounting Estimates, Including Fair Value Accounting Estimates, and Related Disclosures states _______.

• A)the objective of the auditor is to obtain sufficient appropriate evidence that accounting estimates are reasonable and disclosures are adequate
• B)the objective of the internal auditor is to obtain sufficient appropriate evidence that accounting estimates are reasonable and disclosures are adequate
• C)the objective of the auditor is to obtain sufficient appropriate evidence that accounting estimates are reasonable only
• D)the objective of the auditor is to obtain sufficient appropriate evidence that disclosures are adequate only

Understand the concept and application of financial statement analysis for business decisions.

Recognize the tools and standards used for financial statement analysis including comparative statements and common-size analysis.

Calculate and interpret return on total assets, return on ordinary shareholders' equity, basic earnings per share, price earnings ratio, and dividend yield.

Understand the purpose and components of general-purpose financial statements.

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Definitions:

Smoking

The act of inhaling and exhaling the smoke of burning plant material, typically tobacco, which is a known health risk.

Chronic Diseases

Long-term health conditions that are persistent and typically require ongoing management, such as diabetes, heart disease, and chronic lung conditions.

Lung Cancer

A type of cancer that begins in the lungs, which is often attributed to smoking tobacco and exposure to secondhand smoke, radon, asbestos, or other pollutants.

Human Immune System

A sophisticated system of cells, tissues, and organs that collaborates to protect the body from foreign threats, including viruses and bacteria.