Which of the Following Matters Would an Auditor Most Likely

question 6

Multiple Choice

Which of the following matters would an auditor most likely consider to be a significant deficiency to be communicated to the audit committee?

• A)Management's failure to renegotiate unfavorable long-term purchase commitments.
• B)Recurring operating losses that may indicate going concern problems.
• C)Evidence of a lack of objectivity by those responsible for accounting decisions.
• D)Management's current plans to reduce its ownership equity in the entity.

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Definitions:

Trichromatic Theory

A theory of color vision proposing that the eye perceives color through the relative rates of response by three types of cones, each sensitive to different wavelengths of light.

Colour Vision

The ability of the eye to distinguish objects based on the wavelengths of the light they reflect, emit, or transmit.

Estimate

A rough calculation or judgement of the value, number, quantity, or extent of something.

Thirsty

The sensation or condition of needing or desiring to drink fluids, typically as a physiological response to dehydration.