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:

Anticipation

The act of expecting or foreseeing something, often involving preparatory action or adjustments based on predictions about future events or trends.

Inflation

The speed at which the overall price level of goods and services increases, diminishing buying power.

Monetarists

Economists who believe that variations in the money supply have major influences on national output in the short run and the price level over longer periods, as well as on inflation.

Money Supply

The overall quantity of currency and other liquid instruments circulating in an economy at a particular time.