If an External Auditor Suspects Wrongdoing in Financial Statements, the Concerns

question 2

Multiple Choice

If an external auditor suspects wrongdoing in financial statements, the concerns should be addressed to

• A) The audit committee
• B) The management of the company
• C) The Securities and Exchange Commission
• D) The board of directors

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Definitions:

Standard

Typically refers to an accepted level of quality or achievement that is used as a measure, norm, or model in comparative evaluations.

Direct Materials

Raw materials that are directly traceable to the manufacturing of a specific product and are an integral part of the finished product.

Actual Price

The price at which a good or service is sold in the market, as opposed to its listed or theoretical price.

Standard Costing

An accounting method that uses standard costs for cost control and financial reporting.