Communications Between the Auditor and Those Charged with Governance Should

question 19

Multiple Choice

Communications between the auditor and those charged with governance should include all of the following except:

• A) a summary of specific audit procedures used.
• B) significant audit adjustments.
• C) consultations with other accountants.
• D) major issues discussed with management before the auditor was retained.

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Definitions:

Normal Profit

The payment made by a firm to obtain and retain entrepreneurial ability; the minimum income that entrepreneurial ability must receive to induce entrepreneurs to provide their entrepreneurial ability to a firm; the level of accounting profit at which a firm generates an economic profit of zero after paying for entrepreneurial ability.

Entrepreneurial Talent

The unique skills and abilities possessed by individuals that enable them to innovate, start new businesses, and drive economic growth.

Business Cycle

Recurring increases and decreases in the level of economic activity over periods of years; consists of peak, recession, trough, and expansion phases.

Corporate Profits

The surplus income of corporations after paying all expenses, including operational expenses, salaries, and taxes.