When Reviewing the Summary of Misstatements Found in the Audit

question 134

Multiple Choice

When reviewing the summary of misstatements found in the audit,

• A) an adjusting journal entry must be made by the auditor for all material misstatements.
• B) auditors must combine individually immaterial misstatements to evaluate whether the combined amount is material.
• C) the auditor is not required to consider the impact on the current financial statements of misstatements in the prior year that were not corrected.
• D) auditors only need to consider the misstatements that impact the income statement.

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Definitions:

Permanent Disability

A long-term impairment that significantly restricts an individual's ability to engage in work or other daily activities.

Social Security

The federal Old Age, Survivors, Disability, and Health Insurance (OASDHI) program, which combines old age (retirement) insurance, survivor's insurance, disability insurance, hospital insurance (Medicare Part A), and supplementary medical insurance (Medicare Part B) for the elderly.

Defined-Benefit Plan

Pension plan that guarantees a specified level of retirement income.

Jury Duty

The civic responsibility of citizens to serve on a jury in a court of law, contributing to the judicial process by deliberating on legal cases.