The Untrue Statement Concerning the Communication of Internal Control Matters

question 29

Multiple Choice

The untrue statement concerning the communication of internal control matters to management during a financial statement audit is:

• A)the duties relating to communication are included in ASA 265/ISA 265.
• B)the auditor shall communicate in writing significant deficiencies in internal control identified.
• C)circumstances where it may be inappropriate to communicate deficiencies in the internal control system include situations where there are other deficiencies that are of sufficient importance to merit management's attention.
• D)none of the statements are untrue, i.e.all are true statements.

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Definitions:

Days Receivable Outstanding

Days Receivable Outstanding (DRO) is a financial metric that calculates the average number of days it takes a company to collect payment after a sale has been made.

Accounts Receivable

Funds that customers owe a company for products or services that have been provided but remain unpaid.

Sales

The total amount of goods or services sold or provided to customers, generating revenue for a business.

Long-Term Debt To Assets

A ratio indicating the proportion of a company's assets that are financed through long-term debt, showing financial leverage.