The Working Papers Are

question 57

Multiple Choice

The working papers are

• A) the property of client.
• B) prepared by the client's internal auditors.
• C) the primary means of documenting that an adequate audit was conducted in accordance with GAAS.
• D) used primarily as a basis for the partners to review and reward the work of the managers, seniors, and staff.

---

Definitions:

Basic Accounting Equation

The fundamental equation representing the relationship between assets, liabilities, and owner's equity (Assets = Liabilities + Owner's Equity).

Owners' Equity

Represents the residual interest in the assets of a company after deducting liabilities, essentially the owner's claim against the company's assets.

Assets

Resources controlled by a business as a result of past events and from which future economic benefits are expected to flow to the entity.

Cumulative Effect

The total impact of a change in accounting principle or correction of an error reported in a single period's financial statements.