If Auditors Determine That There Is Not a Significant Risk

question 30

True/False

If auditors determine that there is not a significant risk of material improper revenue recognition, no documentation of this decision is required.

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Definitions:

Statement of Cash Flows

A document summarizing the comprehensive cash income from operational and external investment activities, and the cash expenditures on business operations and investments within a set period for a company.

Income Statement

A financial statement that shows a company's revenues, expenses, and profit or loss over a specific period.

Adjusting Entry

Adjusting entries are journal entries made in accounting records at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.

Income Statement

A financial statement that shows a company's revenues, expenses, and net income over a specific period, highlighting operational performance.