Audits of Financial Statements Are Performed By

question 29

Multiple Choice

Audits of financial statements are performed by:

• A)The controller of the reporting company.
• B)The Financial Accounting Standards Board (FASB).
• C)The management of the reporting company.
• D)Independent certified public accountants (CPAs).

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Definitions:

Income Statement

The income statement is a financial report that shows a company's revenues, expenses, and profits over a specific period, highlighting its financial performance.

Contribution Format

An income statement format that separates fixed and variable costs, highlighting the contribution margin of a company's products or services.

Segmented Statements

Financial reports that break down the revenue, costs, and profitability of different parts of a company, such as departments or product lines.

Variable Costing

Variable costing is a costing method that includes only variable production costs—direct materials, direct labor, and variable manufacturing overhead—in unit product costs.