Some Critics Claim the Usefulness of the Audit Report Is

question 60

Multiple Choice

Some critics claim the usefulness of the audit report is limited because:

• A)Auditors do not examine management's estimates and judgments
• B)Language in the audit report relies on subjective evaluations such as what is meant by "reasonable"
• C)Transactions examined are based on sampling and other techniques to limit choices of which transactions to audit
• D)All of the above may create doubts about usefulness

Understand the implications of not making adjusting entries on financial statements.

Calculate the correct amount of reported revenue for transactions involving unearned revenue.

Determine the book value of depreciable assets after accounting for depreciation expense.

Apply the concept of accrued interest on notes payable in adjusting entries.