Defining Notable Items Depends on _______

question 24

Multiple Choice

Defining notable items depends on _______.

• A)the assertion being audited, and the auditor's understanding of the business and industry.
• B)the assertion being audited only
• C)the auditor's understanding of the business and industry only
• D)neither the assertion being audited, nor the auditor's understanding of the business and industry.

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Definitions:

FMV

Fair Market Value refers to the price at which property would sell on the open market between a willing buyer and a willing seller.

Dividend Income

Income received from owning shares in a company, which represents a distribution of the company's earnings.

Schedule M-1

A form used in corporate taxation to reconcile financial statement income with taxable income reported on U.S. federal tax returns.

Book Income

The income reported by a business for financial accounting purposes, which may differ from taxable income due to different accounting methods.