In Regard to Identifying and Evaluating Subsequent Events, AU 560

question 15

Multiple Choice

In regard to identifying and evaluating subsequent events, AU 560.12 specifies that the auditor inquires of management having responsibility for financial and accounting matters as to all of the following except:

• A) any substantial contingent liabilities or commitments existing at the balance sheet date or date of inquiry.
• B) any significant changes in capital stock, long-term debt, or working capital to the date of inquiry.
• C) the minutes of meetings of directors, stockholders, and other appropriate committees.
• D) the current status of items previously accounted for on the basis of tentative, preliminary, or inconclusive data.
• E) whether any unusual adjustments have been made since the balance sheet date.

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Definitions:

Managed Care

A healthcare delivery system aimed at managing cost, quality, and utilization of services by contracting with specific providers and implementing guidelines for treatment.

IRS Requirements

The legal and regulatory stipulations established by the Internal Revenue Service that individuals and organizations must follow.

Defined-Benefit Plan

A type of pension plan in which an employer promises a specified pension payment upon retirement, determined by a formula considering factors like salary and duration of employment.

Cash Balance Plans

A type of defined benefit pension plan that holds an employee's retirement savings as a hypothetical account balance, which grows annually through employer contributions and interest credit rates.