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Indicate the Possible Reasons and Actions the Auditor May Take

question 16

Essay

Indicate the possible reasons and actions the auditor may take when the upper misstatement limit exceeds tolerable misstatement in a PPS sampling plan.


Definitions:

Long-Term

Refers to assets, liabilities, or investments that are expected to be held or have an effect for a period exceeding one year.

Current

Pertaining to assets or liabilities expected to be consumed, sold, or settled within one fiscal year or the operating cycle, whichever is longer.

FASB

The Financial Accounting Standards Board, responsible for establishing and improving standards of financial accounting and reporting in the U.S.

Legal Obligations

Commitments or duties that are enforced by law, requiring entities or individuals to act or refrain from acting in a certain way.

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