A Material Weakness Because the Oversight of the External Financial

question 40

Multiple Choice

A material weakness because the oversight of the external financial reporting function by the audit committee is ineffective will ordinarily result in communication to: $\begin{array}{l}\begin{array}{lcc}&&\text { The Stock Exchange That the }\\ & \text { PCAOB } & \text { Company is Listed on } \\\text { A. } & \text { Yes } & \text { Yes } \\\text { B. } & \text { Yes } & \text { No } \\\text { C. } & \text { No } & \text { Yes } \\D.&\text { No } & \text { No }\end{array}\end{array}$

• A)Option A
• B)Option B
• C)Option C
• D)Option D

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Definitions:

Fundamental Characteristics

Essential qualities or attributes that are critical to the definition, operation, or function of a concept, often used in reference to accounting principles.

Assets

Resources owned by a business from which future economic benefits are expected to flow to the enterprise.

Equity

The value of an ownership interest in property or a business, calculated as total assets minus total liabilities; represents what the owners' claim on the assets is.

Entity Assumption

The accounting principle that treats a business as a separate legal and accounting entity, distinct from its owners, managers, or operators.