As Per CAS 240,when an Auditor Inquires About the Risk

question 7

Multiple Choice

As per CAS 240,when an auditor inquires about the risk of fraud and errors within the organization,what are the auditors not required to discuss with management?

• A)Management's assessment of the risk that the financial statements may be materially misstated due to fraud.
• B)Management's communication,if any,to those charged with governance regarding its processes for identifying and responding to the risks of fraud.
• C)Management's process for identifying and responding to the risks of fraud in the entity.
• D)The auditor's analytical procedures.

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Definitions:

(Paid-In) Capital

The amount of money that a company has received from shareholders in exchange for shares of stock, contributing to the company's equity.

Capital Stock

The total amount of shares a company can issue, as authorized by its corporate charter.

Partnership

A legal form of business operation between two or more individuals who share management and profits.

Debts Of Entity

Financial obligations that a company or individual owes to external parties or creditors.