Inquiries of Management (Orally and in Writing)regarding the Possibility of Unrecorded

question 54

Multiple Choice

Inquiries of management (orally and in writing) regarding the possibility of unrecorded contingencies will NOT be useful in uncovering:

• A) a particular type of contingency which management has overlooked.
• B) a contingency where management does not comprehend account disclosure requirements.
• C) management's intentional failure to disclose existing contingencies.
• D) all of the above

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Definitions:

Liquidation Value

Net amount that could be realized by selling the assets of a firm after paying the debt.

Common Share

A type of equity security that represents ownership in a corporation, entitling the holder to a share of the company's profit through dividends and/or capital appreciation.

P/E Ratios

The Price-to-Earnings Ratio, a valuation metric comparing a company's current share price to its per-share earnings, used to evaluate stock price reasonableness.

Ceteris Paribus

A Latin term meaning "all other things being equal," used in economics to isolate the effect of one variable by holding others constant.