What Is an Auditor's Responsibility for Supplementary Information That Is

question 17

Multiple Choice

What is an auditor's responsibility for supplementary information that is outside the basic financial statements but required by accounting guidelines?

• A)The auditor should apply certain limited procedures to the required supplementary information and add an explanatory paragraph to the financial statement audit report.
• B)The auditor has no responsibility for required supplementary information as long as it is outside the basic financial statements.
• C)The auditor's only responsibility for required supplementary information is to determine that such information has not been omitted.
• D)The auditor should apply tests of details of transactions and balances to the required supplementary information and report any material misstatements in such information.

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Definitions:

Direct Labor

The wages paid to workers who are directly involved in the production of goods or services.

Accounts Receivable Clerks

Employees responsible for managing and tracking the money owed to a business by its debtors.

Total Wages

Represents the cumulative amount of wages paid to all employees over a specific time period.

Standard Cost Formula

A calculation method used to estimate the expected cost of production under normal conditions, including direct materials, labor, and overhead costs.