How Do Auditors Make the Following Representations When Issuing the Standard

question 104

Multiple Choice

How do auditors make the following representations when issuing the standard (unmodified) auditors' report? $\begin{array}{l}\begin{array}{ll}\text { Consistent } && \text { Independence } \\\text { Application of } && \text { Requirement }\end{array}\\\text { Accounting Principles }\end{array}$
A. $\begin{array}{lll} & \text { Implicitly } &&& \text { Explicitly } \\\end{array}$
B. $\begin{array}{lll}& \text { Explicitly } &&& \text { Implicitly } \\\end{array}$
C. $\begin{array}{lll}& \text { Implicitly } &&& \text { Explicitly } \\\end{array}$
D. $\begin{array}{lll}& \text { Explicitly } &&& \text { Explicitly }\end{array}$

• A)Option A
• B)Option B
• C)Option C
• D)Option D

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Definitions:

Responsibility Centers

Entities within an organization responsible for controlling revenue and expenses, influencing the operational and financial results.

Cost Centers

Parts of an organization where costs can be identified and directly attributed, but which do not directly generate revenue.

Profit Centers

Parts of an organization that directly contribute to its profit through their operations and are responsible for their own revenues and costs.

Decentralized Operations

A management structure where decision-making and operations are distributed among various autonomous units or departments within an organization.