Following Are Several Statements Regarding Accounting Records or Audit Documentation

question 25

Multiple Choice

Following are several statements regarding accounting records or audit documentation.Which of the statements is correct?

• A) Accounting records belong to the client.
• B) Documentation of an auditor's understanding of client's internal control system is not necessary.
• C) Audit documents may be regarded as a substitute for the client's accounting records.
• D) The independent auditor may discard audit documents after two years.

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Definitions:

Follower Brands

Brands that enter a market by following the trends set by the leading brands, rather than innovating on their own.

Incremental Innovation

Refers to minor improvements or simple adjustments made to existing products, services, or processes.

Market Driven

Describes a business strategy or approach that is guided by the needs and wants of the market and customers.

Follower Brands

Brands that do not lead in innovation or market share in their category but follow trends set by others, often focusing on adapting to established market dynamics.