Which of the Following Statements Is True Regarding the Communication

question 148

Multiple Choice

Which of the following statements is true regarding the communication of audit engagement observations?

• A) Criteria, condition, cause, and effect must be communicated for material observations only
• B) Criteria, condition, cause, and effect must be communicated for material observations and significant deficiencies only
• C) Criteria, condition, cause, and effect must be communicated for all engagement observations.
• D) Criteria, condition, cause, and effect do not need to be communicated for insignificant observations with adequate compensating key controls.

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Definitions:

Income Received

The total earnings obtained by individuals or entities, typically through employment, investments, or other sources, during a specified period.

Lower Two Quintiles

Refers to the bottom 40% of a population when it is divided into five equal groups according to income levels.

Income Earned

The total amount of money received by an individual or a business in exchange for labor or the provision of services during a certain period.

Black Children

A term referring to children of African or African American descent.