When Auditing Debt and Equity Transactions,the Auditor Should Be Skeptical,and

question 72

True/False

When auditing debt and equity transactions,the auditor should be skeptical,and therefore alert to the possibility that management is managing earnings by not appropriately recording expenses,such as charging expenses directly to retained earnings or under-recording interest expense.

---

Definitions:

Significance Level

The probability of rejecting the null hypothesis when it is actually true, often denoted by alpha (α), used as a threshold for determining the statistical significance of a test result.

Significant Level

Significant level is another term for significance level, denoting the probability of rejecting the null hypothesis in statistical hypothesis testing when it is true.

Primary Issue

The initial offering of shares to the public by a company or the first time a stock is listed on the stock market.

Seat Belts

Safety devices designed to secure the occupants of a vehicle against harmful movement that may result during a collision or a sudden stop.