The Concept of _____ Recognizes That a GAAS Audit May

question 59

Multiple Choice

The concept of _____ recognizes that a GAAS audit may fail to detect all material misstatements.

• A)absolute assurance
• B)due care
• C)reasonable assurance
• D)risk of material misstatement

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Definitions:

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period, leading to the net income or loss.

Statement of Cash Flows

A financial statement that shows the cash inflows and outflows for a business over a specified period.

Retained Earnings

The amount of net earnings left over for the company after it has paid out dividends to its shareholders.