Which of the Following Matters Is an Auditor Required to Communicate

question 74

Multiple Choice

Which of the following matters is an auditor required to communicate to those charged with governance?

• A)The basis for assessing control risk at low.
• B)The disagreements with management, if any.
• C)The auditor's preliminary judgments about materiality levels.
• D)The justification for performing substantive procedures at interim dates.

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Definitions:

Period Costs

Expenses that are not directly tied to production activities, typically including selling, general, and administrative expenses.

Income Statement

An Income Statement is a financial document that shows a company's revenues and expenses over a specific period, highlighting its profit or loss.

Expenses

The costs incurred in the process of earning revenue, categorized as operating or non-operating depending on their nature.

Product Costs

Costs that are incurred to acquire or manufacture a product and include direct materials, direct labor, and manufacturing overhead.