This Question Will Represent a Statement, Question, Excerpt, or Comment

question 220

Multiple Choice

This question will represent a statement, question, excerpt, or comment taken from various parts of an auditor's documentation file. Letter choices A-P represent a list of the likely sources of the statement, question, excerpt, or comment. Select, as the best answer for each item, the most likely source. Select only one source for each item. As discussed in Note 4 to the financial statements, the company experienced a net loss for the year ended July 31, 20XX, and is currently in default under substantially all of its debt agreements. In addition, on September 25, 20XX, the company filed a prenegotiated voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code. These matters raise substantial doubt about the company's ability to continue as a going concern.

• A) Practitioner's report on management's assertion about an entity's compliance with specified requirements.
• B) Auditor's communications on significant deficiencies in internal control.
• C) Audit inquiry letter to legal counsel.
• D) Lawyer's response to audit inquiry letter.
• E) Communication from those charged with governance to the auditor.
• F) Auditor's communication to those charged with governance (other than with respect to significant deficiencies in internal control
• G) Report on the application of accounting principles.
• H) Auditor's engagement letter.
• I) Letter for underwriters.
• J) Accounts receivable confirmation request.
• K) Request for bank cutoff statement.
• L) Explanatory paragraph of an auditor's report on financial statements.
• M) Partner's engagement review notes.
• N) Management representation letter.
• O) Successor auditor's communication with predecessor auditor.
• P) Predecessor auditor's communication with successor auditor.

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Definitions:

Target Markets

Specific groups of potential customers at whom a company directs its marketing efforts.

Marketing Mix

A combination of factors that can be controlled by a company to influence consumers to purchase its products. These include product, price, place, and promotion.

Industry Trends

Patterns or general directions in which a specific industry is moving, often determined by changes in technology, consumer behavior, or regulatory environments.

Share Points

Analysis that uses percentage points of market share as the common basis of comparison to allocate marketing resources effectively for different product lines within the same firm.