An Auditor Should Expect That Fair Value Is the Price

question 31

Multiple Choice

An auditor should expect that fair value is the price that would be received to sell an asset in an orderly transaction between the market participants at the:

• A)Acquisition date of the asset.
• B)Audit report date.
• C)Expected replacement date of the asset.
• D)Measurement date (ordinarily the date of the financial statements).

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Definitions:

Sensation

The process by which sensory receptors and the nervous system receive stimuli from the environment, such as touch, taste, smell, sound, and sight.

Perception

The process by which sensory information is organized, interpreted, and consciously experienced.

20,000 Hz

The frequency of soundwaves that typically represents the upper limit of human hearing.

Iris

The colored part of the eye that controls the size of the pupil and the amount of light that enters the eye.