The Auditor Learned the Following in the Course of an Audit

question 14

Multiple Choice

The auditor learned the following in the course of an audit engagement.Which of the items, discovered by the auditor, need not be communicated to the audit committee?

• A)The theft of several items of inventory by warehouse employees.
• B)Management's significant accounting policies.
• C)Significant audit adjustments recommended by the auditors.
• D)All of these items should be communicated to the audit committee.

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Definitions:

MC Of Reducing

The marginal cost associated with reducing an output or activity, usually referring to cutting down on production or operational processes.

Marginal Social Benefit

The additional benefit to society from consuming or producing one more unit of a good or service.

Marginal Social Cost

The extra expense borne by the entire society resulting from the manufacture of an additional unit of a product or service.

Trade Permits

Legal documents or licenses required to engage in certain types of trade or business, often used to regulate or protect industries.