If the Auditor Is Performing Substantive Tests at an Interim

question 31

Multiple Choice

If the auditor is performing substantive tests at an interim date, _______.

• A)then this testing will suffice and no further testing needs to be done
• B)the auditor should perform no further steps to update their conclusion through the date of the financial statements
• C)the auditor must perform steps to update their conclusion to the date of the financial statements
• D)the auditor should plan to conduct more tests once the audit report has been issued

Determine what constitutes significant influence and its indicators under IAS 28.

Distinguish between strategic and non-strategic investments based on accounting methods.

Recognize the accounting treatment of investments under IFRS 9.

Understand reporting requirements under the Accounting Standards for Private Enterprises (ASPE).

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Definitions:

ROA

Return on Assets, a financial ratio indicating the profitability of a company relative to its total assets.

Capital Structure

The mix of a company's long-term debt, specific short-term debt, common equity, and preferred equity, which is used to finance its overall operations and growth.

ROE

Return on Equity, measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested.

Statement of Cash Flows

A financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents, dividing activities into operating, investing, and financing activities.