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:

Interest Rate

The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the loan remaining.

Basic Formula

Typically refers to the accounting equation: Assets = Liabilities + Equity.

Calculating Interest

The process of determining the monetary charge for borrowing money or the return on investment for savings, typically through a predetermined formula.

Note Receivable

A written promise for the payment of a specified amount of money at a set time to the holder or bearer of the note.