When Evaluating the Audit Findings, the Auditor Should Be Satisfied

question 73

Multiple Choice

When evaluating the audit findings, the auditor should be satisfied that the

• A) amount of known misstatement is documented in the management representation letter.
• B) estimate of the total known and likely misstatements is less than a material amount.
• C) estimate of the total likely misstatement includes sample error.
• D) amount of known misstatement is acknowledged and recorded by the client.

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Definitions:

Utility-Maximizing

The economic principle where individuals or entities choose to allocate their resources in a way that maximizes their satisfaction or utility.

Marginal Utility-To-Price Ratio

A measure of the additional satisfaction gained from consuming one more unit of a good or service relative to its cost.

Consumer Choice

The decision-making process by which individuals select and consume products or services to satisfy their desires and needs.

Highest Marginal

Referring to the highest additional cost or benefit gained from producing or consuming one extra unit of a good or service.