When Performing a Review of a Nonpublic Company,the Auditors Must

question 16

Multiple Choice

When performing a review of a nonpublic company,the auditors must obtain in a representation letter acknowledgement of management for its responsibility for reach of the following except:

• A)Responsibility for identifying illegal acts committed by employees.
• B)Responsibility for the financial statements conforming with generally accepted accounting principles.
• C)Responsibility to prevent and detect fraud.
• D)Knowledge of any actual or suspected fraud that is material.

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Definitions:

Labor Earnings

Income received by workers for their labor services, including wages, salaries, and other forms of compensation.

Government Policy

Actions or inactions chosen by government officials to address specific public issues, ranging from economic regulations to social welfare programs.

Natural Rate

Often refers to the natural rate of unemployment, which is the level of unemployment consistent with a stable rate of inflation, or the equilibrium rate unaffected by short-term fluctuations.

Fully Employed

Refers to a situation where all available labor resources are being used in the most economically efficient way.