The Dollar Amount of Some Misstatements Cannot Be Accurately Measured

question 141

Multiple Choice

The dollar amount of some misstatements cannot be accurately measured. For example, if the client were unwilling to disclose an existing lawsuit, the auditor must estimate the likely effect on

• A) net income.
• B) users of the financial statements.
• C) the auditor's exposure to lawsuits.
• D) management's future decisions.

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Definitions:

Consumer Credit Protection Act

A federal law that was enacted to ensure fair and honest credit practices, including provisions for the disclosure of credit terms.

Credit Applicant

An individual or organization applying for a line of credit or a loan from a lending institution.

Deductive Outline

is a framework for organizing information or arguments that starts with a general statement or hypothesis and then presents specific evidence or examples.

Feedback Message

Information returned to the sender about the effectiveness or impact of a communication.