Ambrose Is Auditing the Financial Statements of Mays (Dated December

question 54

Multiple Choice

Ambrose is auditing the financial statements of Mays (dated December 31,2012) .The date of the auditors' report is February 17,2013 and the audit report release date is February 20,2013.For which of the following matters would Ambrose have the least responsibility:

• A) The obsolescence of inventory held on December 31, 2012 that was identified on January 20, 2013.
• B) A customer's deteriorating financial condition that was identified on February 19, 2013.
• C) A merger that was announced by Mays and known by Ambrose on February 12, 2013.
• D) A major loss due to a catastrophe that occurred and was known by Ambrose on March 1, 2013.

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Definitions:

Savings Rate

is the proportion of disposable income that households save rather than spend on consumption.

Federal Budget

A government plan for revenue and spending for a coming fiscal year, detailing how funds will be allocated among various government departments and programs.

Industrial Country

Refers to a nation with a well-developed industrial base, where manufacturing and other industries contribute significantly to the economy.

Medical Administrative Cost

Expenses associated with the administration of medical services, such as billing and insurance processing.