An Important Part of Evaluating Whether the Financial Statements Are

question 19

Multiple Choice

An important part of evaluating whether the financial statements are fairly stated is summarizing the misstatements uncovered in the audit.Whenever the auditor uncovers misstatements that are in themselves material,

• A)entries should be proposed to the client to correct the statements.
• B)no entries need to be made but footnote disclosure is required.
• C)it is necessary to combine individually immaterial misstatements with the material misstatements and make entries to correct the statements.
• D)it is necessary to combine individually immaterial misstatements with the material misstatements and make full disclosure in the footnotes.

---

Definitions:

Net Present Value

A financial metric that calculates the present value of an investment's cash inflows and outflows over time to determine its profitability.

Budget

An estimate of income and expenditure for a set period of time, often used to plan and control finances within organizations or by individuals.

Orlando

A city in central Florida, known for its theme parks, including Walt Disney World and Universal Studios.

Minnesota

A state located in the Midwestern United States, known for its large number of lakes and cold winters.