The Auditor Has No Responsibility to Plan and Perform the Audit

question 106

Multiple Choice

The auditor has no responsibility to plan and perform the audit to obtain reasonable assurance that misstatements, whether caused by errors or fraud, that are not ________ are detected.

• A)important to the financial statements
• B)statistically significant to the financial statements
• C)material to the financial statements
• D)identified by the client

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Definitions:

Internal Rate of Return Method

A capital budgeting method used to estimate the profitability of potential investments, calculated as the rate that makes the net present value of all cash flows zero.

Present Value Concepts

Financial principles used to determine the current value of future cash flows, taking into account specific rates of return or discount rates.

Net Cash Flows

The difference between a company's cash inflows and outflows within a defined period.

Annuity

A financial instrument that provides a consistent flow of payments to a person, mainly serving as a source of income for people in retirement.