Your Client,Macilbink Ltd

question 29

Multiple Choice

Your client,Macilbink Ltd. ,manufactures calendars,books,and magazines.The printing presses that they use are only three years old,yet new technology has been developed that would result in cuts in ink and electricity costs by over 20%,while simplifying the setup process,making smaller production runs more feasible.Macilbink Ltd.is facing lowered demand for its products and will need to change direction or innovate to stay in business.The effect of the new printing technology has resulted in which of the following risk assessment changes by Macilbink Ltd.'s auditors?

• A)decreased control risk
• B)increased control risk
• C)decreased client business risk
• D)increased client business risk

Understand the legal requirements and implications of accepting drafts.

Grasp the correct procedures for endorsing checks and the effects of endorsement orders on negotiability.

Learn the types of endorsements and their legal consequences.

Recognize the implications of forgery and liability in payment instruments.

---

Definitions:

Fair Value

The proceeds from the sale of an asset or the outlay to move a liability in a non-chaotic market operation on the date of gauging.

Subsidiary

A company controlled by another company, termed as the parent company, usually through majority share ownership.

Disclosure

The process of providing financial and other significant information about a company's operations, financial condition, and management to stakeholders.

Fair Market Value

The cost at which an asset would be sold in an open market scenario, involving a buyer and a seller who are both willing to transact and are well-informed about the essential details.