Auditing Standard #5 Requires

question 45

Multiple Choice

Auditing Standard #5 requires:

• A) auditors perform tests of internal control.
• B) auditors have technical competence to perform audits.
• C) auditors exercise professional skepticism.
• D) Both b and c

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Definitions:

Prepaid Expenses

Expenses paid in advance for goods or services to be received in the future.

Insurance Expense

The cost associated with purchasing insurance to protect against various risks, recorded as an expense.

Unearned Revenue

Money received by a company for goods or services yet to be provided. It is considered a liability until the service is delivered or the product is provided.