An Auditor Should Examine Minutes of the Board of Directors

question 172

Multiple Choice

An auditor should examine minutes of the board of directors' meetings

• A) through the date of the financial statements.
• B) through the date of the audit report.
• C) only at the beginning of the audit.
• D) on a test basis.

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Definitions:

Net Operating Income

A profitability measure that calculates a company's income after operating expenses are subtracted but before deducting interest and taxes.

Break-even Sales

The amount of revenue needed to cover total costs, both fixed and variable, at which point a business neither makes a profit nor incurs a loss.

Wholesale Division

A segment of a company that deals with selling goods in large quantities at lower prices typically to retailers, rather than selling them directly to consumers.

Fixed Expenses

Expenses, like rent, wages, and insurance fees, that stay the same no matter how much is produced or sold.