Which of the Following Is Not an Example of a Significant

question 30

Multiple Choice

Which of the following is not an example of a significant inherent risk?

• A) Management override of internal controls.
• B) The impact of technological developments.
• C) Inadequate accounting skills.
• D) Management turnover.
• E) Contentious accounting issues.

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Definitions:

Retained Earnings

The portion of a company's profit that is held or retained and saved for future use, reinvestment in the business, or to pay debt, rather than being paid out as dividends.

Additional Paid-In Capital

The excess amount paid by investors over the par value of shares, reflecting the additional capital contributed to a corporation.

Accumulated Comprehensive Income

The total of all net income and other comprehensive income items that have been accumulated over the life of a company.

Net Income

The total profit or loss a company generates from its operations, after subtracting all expenses, taxes, and costs.