AU 34209 Explains That the Auditor Should Normally Concentrate on the the Key

question 40

Multiple Choice

AU 342.09 explains that the auditor should normally concentrate on the key factors and assumptions used by management including all of the following except those that are:

• A) insignificant to the accounting estimate.
• B) sensitive to variations.
• C) subject to misstatement and bias.
• D) deviations from historical patterns.
• E) susceptible to misstatement and bias.

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Definitions:

Manufacturing Business

A type of business that produces finished goods from raw materials by using various processes and operations.

Line Shutting Down

The process of stopping or closing a production line or part of a business operation, often temporarily or permanently.

Computer Desks

Furniture designed to accommodate desktop computers, peripherals, and related accessories, often including features like keyboard trays and cable management.

Brokers

Intermediaries who arrange or negotiate transactions between buyers and sellers for a commission or fee.