The Management's Responsibility Section of the Standard Audit Report for a Non-Public

question 49

Multiple Choice

The management's responsibility section of the standard audit report for a non-public company states that the financial statements are:

• A)the responsibility of the auditor.
• B)the responsibility of management.
• C)the joint responsibility of management and the auditor.
• D)none of the above.

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Definitions:

Cash Flows

The total amount of money being transferred into and out of a business, especially as affecting liquidity.

Income Recognition

The accounting principle that revenue should only be recognized after the business has fulfilled its obligations and the payment is certain.

Direct Method

A method for creating a cash flow statement where actual cash flow information from operations is used rather than adjustments to net income.

Operating Cash Receipts

Cash received by a company from its core business operations.