An Auditor's Analytical Procedures Indicate a Lower Than Expected Return

question 57

Multiple Choice

An auditor's analytical procedures indicate a lower than expected return on an equity method investment. This situation most likely could have been caused by:

• A)an error in recording amortization of the excess of the investor's cost over the investment's underlying book value.
• B)the investee's decision to reduce cash dividends declared per share of its common stock.
• C)an error in recording the unrealized gain from an increase in the fair value of available-for-sale securities in the income account for trading securities.
• D)a substantial fluctuation in the price of the investee's common stock on a national stock exchange.

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Definitions:

Ethnocide

The violent eradication of an ethnic group's collective cultural identity as a distinctive people; occurs when a dominant society deliberately sets out to destroy another society's cultural heritage.

Indigenous Peoples

Refers to ethnic groups native to a land or region, usually with distinct cultures and social institutions prior to colonization or annexation.

Cultural Homogenization

The process through which local cultures are influenced and assimilated by a dominant culture, leading to reduced cultural diversity.

McDonaldization

The process by which the principles of the fast-food industry, such as efficiency, predictability, and control, dominate other sectors of society.