The Performance Section of Principles Underlying an Audit Conducted in Accordance

question 26

Multiple Choice

The Performance section of Principles Underlying an Audit Conducted in Accordance with GAAS states that for auditors to obtain reasonable assurance, they need to do all of the following except:

• A)make sure all audit team members have adequate training.
• B)obtain sufficient appropriate audit evidence.
• C)identify and assess risks of material misstatement.
• D)determine and apply appropriate materiality levels.

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Definitions:

Income Tax Rate

The percentage of taxable income that individuals or corporations are required to pay to the government.

Working Capital

The difference between a company's current assets and current liabilities, indicating the liquidity and operational efficiency.

Straight-Line Depreciation

A way of allocating the financial burden of a material asset over its effective lifespan in identical yearly portions.

Discount Rate

The interest rate used to discount future cash flows to present value to account for risk and time value of money.