Which of the Following Is NOT Required to Be Communicated

question 71

Multiple Choice

Which of the following is NOT required to be communicated to the audit committee or similarly designed body under ASA 260?

• A) difficulties encountered in performing the audit, such as lack of availability of client personnel and failure to provide necessary information
• B) all material irregularities and illegal acts of a material nature
• C) the auditor's responsibilities under generally accepted auditing standards, including responsibility for evaluating internal control and the concept of reasonable rather than absolute assurance
• D) disagreements with management about the scope of the audit, applicability of accounting principles, or wording of the audit report

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Definitions:

Financial Ratios

Quantitative measures derived from financial statement data used to evaluate a company's financial performance, financial health, and to compare it with other businesses or the industry average.

Default Risk

The possibility that a borrower will be unable to make the required payments on their debt obligations.

Days Payable Outstanding

A financial ratio that measures the average number of days a company takes to pay its suppliers; an indicator of how efficiently a company manages its payables.

Cash Receipts

The collection of money, including coins, currency, checks, and electronic transfers, received by a business or organization.