In Its 2004 Through 2006 Inspections, Which of the Following

question 116

Multiple Choice

In its 2004 through 2006 inspections, which of the following was not a deficiency the PCAOB noted related to inadequate testing of stockholders' equity transactions?

• A) The auditors failed to properly address and evaluate the substance, business purpose, or significant terms of the equity arrangements.
• B) The auditors failed to consider the accounting principles potentially applicable to the equity transactions.
• C) The auditors failed to evaluate whether the audit clients had appropriately determined the fair values assigned to equity-based transactions and to test the reasonableness of such fair values.
• D) The auditors failed to disclose each class of stock issued by the clients.

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Definitions:

Feedback

Information given to a person or group about their performance or behavior with the intent to guide future improvements.

Group's Environment

The physical and social setting in which a group operates, including all external factors that influence the group's dynamics.

Agency Support

Refers to assistance provided by organizations to individuals in need, aimed at improving their well-being through various services and resources.

Interagency Networks

Collaborative frameworks connecting different organizations and agencies to achieve common objectives.