An Adjusting Event Is One That

question 37

Multiple Choice

An adjusting event is one that:

• A) occurs before the auditor signed the audit report.
• B) provides additional evidence of or information about conditions that existed at the reporting date.
• C) occurs after reporting date and relates to impacts that will occur before the time of completion.
• D) provides additional evidence of or information about conditions that existed at the time of completion.

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Definitions:

Semistrong-Form Efficient

A market hypothesis stating that share prices incorporate all publicly available information, making it impossible to consistently achieve higher returns.

Weak-Form Efficient

A market hypothesis suggesting that all past prices of stock are reflected in the current price, hence historical data cannot be used to predict future prices.

Strong-Form Efficient

A hypothesis that states all information, both public and private, is completely accounted for in stock prices, and that no investor can achieve consistently higher returns.

CAPM

The Capital Asset Pricing Model, a formula used to determine the expected return of an asset based on its beta and expected market returns, thus assessing its inherent risk and cost of capital.