According to the Standards, Which of the Following Best Describes

question 392

Multiple Choice

According to the Standards, which of the following best describes why initial audit test results should be reported to the auditor-in-charge prior to advising management?

• A) It increases the likelihood of obtaining the audit client's agreement with the results.
• B) It ensures that an appropriate chain of evidence is maintained through the workpapers.
• C) It helps ensure that appropriate professional judgments and conclusions are made.
• D) It is required to demonstrate that effective engagement supervision has occurred.

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Definitions:

Income Tax Return

A document filed with the government that reports income, expenses, and other pertinent tax information.

Depreciation Method

A systematic approach used to allocate the cost of a tangible asset over its useful life, reflecting consumption, wear and tear, or obsolescence of the asset.

Units-of-Production Method

A depreciation method where the expense is based on the asset's usage, output, or units produced, rather than time.

Straight-Line Method

A method of calculating depreciation by evenly allocating the cost of an asset over its useful life.