In the Course of the Audit of Financial Statements for the Purpose

question 83

Multiple Choice

In the course of the audit of financial statements for the purpose of expressing an opinion thereon,the auditors will normally prepare a schedule of unadjusted differences for which the auditors did not propose adjustments when they were identified.What is the primary purpose served by this schedule?

• A)To point out to the responsible client officials the errors made by various company personnel.
• B)To summarize the adjustments that must be made before the company can prepare and submit its federal tax return.
• C)To identify the potential financial statement effects of misstatement or disputed items that were considered immaterial when discovered.
• D)To summarize the misstatements made by the company so that corrections can be made after the audited financial statements are released.

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Definitions:

Null Hypothesis

A default hypothesis that there is no significant difference or association, used as a starting assumption in statistical testing.

F-ratio

The calculated statistic in ANOVA tests, determining whether there are any statistically significant differences between the means of three or more unrelated groups.

Income Levels

The categorized or continuous ranges of income received by individuals, households, or families, often used in socioeconomic and demographic analysis.

F Ratio

A statistic used in analysis of variance (ANOVA) to determine whether the means of several groups are equal.