What Is an Auditor's Responsibility for Supplementary Information, Such as Segment

question 20

Multiple Choice

What is an auditor's responsibility for supplementary information, such as segment information, that is outside the basic financial statements, but required by the FASB?

• A)The auditor has no responsibility for required supplementary information as long as it is outside the basic financial statements.
• B)The auditor's only responsibility for required supplementary information is to assist in preparing the supplementary information.
• C)The auditor is required to read the other information and consider whether such information is consistent with the information in the financial statements.
• D)The auditor should apply tests of details of transactions and balances to the required supplementary information and report any material misstatements in such information.

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Definitions:

Money Supply

The sum of all financial resources in the form of cash, coins, and bank account balances present in an economy at a certain time.

Tight Money Policy

A monetary policy strategy used by central banks to slow economic growth by increasing interest rates and reducing the supply of money.

Government Bonds

Fixed-income securities issued by a government to support government spending, typically offering a regular interest payment and repayment of the principal at maturity.

Easy Money

A monetary policy stance characterized by low interest rates and high availability of credit to encourage economic growth.