Comparatives Refer to Amounts or Disclosures of One or More

question 1

Multiple Choice

Comparatives refer to amounts or disclosures of one or more previous periods that are presented on a comparative basis with those of the current period.ASA 710 (ISA 710) states that the auditor:

• A)is not required to investigate the comparatives.
• B)is required to add an 'emphasis of matter' to the audit report.
• C)is required to determine whether the comparatives take into account the change of auditor.
• D)is required to determine whether the comparatives meet the requirements of the applicable financial reporting framework.

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Definitions:

Sales

The exchange of goods or services for money, constituting the revenue of a business.

Pledging Accounts Receivable

The use of accounts receivable as collateral to secure a loan, without transferring the title.

Promissory Note

A financial instrument where one party (the issuer) promises in writing to pay a determinate sum of money to the other (the payee), either at a fixed or determinable future time or on demand of the payee, under specific terms.

Maturity

The date on which a financial obligation, such as a bond or loan, is due to be fully repaid.