The Most Significant Audit Issue That Came as a Result

question 6

Multiple Choice

The most significant audit issue that came as a result of the court decision in the Escott et al. v. BarChris Construction Corporation case in 1968 was

• A) the court's reaffirmation that the burden of proof was on the plaintiff to prove the auditor was negligent.
• B) the affirmation of an increase in the auditor's responsibility when performing a review of events subsequent to the balance sheet date (S-1 review) for registration statements.
• C) the increased auditor responsibility when associated with unaudited financial statements.
• D) the court's refusal to allow the percentage-of-completion method of accounting for revenues.

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Definitions:

Analysis Results

The outcomes or findings of a systematic examination or evaluation, often related to financial data or company performance.

Net Present Value Rule

A financial metric for evaluating the profitability of an investment, measuring the difference between the present value of cash inflows and the present value of cash outflows over time.

Creates Value

Generally refers to actions or processes that increase the worth of a product, service, or company to stakeholders.