The Auditors Informed the Company That the Provision for Long

question 15

Multiple Choice

The auditors informed the company that the provision for long service leave was understated by $100 000 at 30 June 2012 and that the account should be adjusted.The company adjusted the account so that:

• A) liabilities increase and profit decreases
• B) liabilities increase but profit is unaffected
• C) profit increases but there is no effect on liabilities
• D) there is no effect on either profit or liabilities.

---

Definitions:

Transform Fault

A geological fault where the movement of the Earth's crust is predominantly horizontal, often leading to earthquakes in these regions.

Subduction Zone

A region of the Earth's crust where one tectonic plate moves under another, often associated with volcanic activity and earthquakes.

Ethics Officer

A professional responsible for fostering a culture of ethical conduct within an organization, including developing policies, training, and advice on ethics and compliance issues.

Ethics Standards

Guidelines or codes designed to set out acceptable behaviors and help individuals make moral decisions in their personal and professional lives, aiming to uphold integrity and honesty.