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:

Iodine-Potassium-Iodide

An aqueous solution made of iodine and potassium iodide used as a chemical indicator and antiseptic.

Amylase Activity

The process by which the enzyme amylase breaks down starches into simpler sugars, a key step in carbohydrate digestion.

Starch

is a carbohydrate consisting of a large number of glucose units joined together, serving as a key energy source in many plants and diets.

Enzyme Catalyzes

Refers to the acceleration of a biochemical reaction by a protein enzyme.