Audits of Financial Statements Are Designed to Obtain Reasonable Assurance

question 55

Multiple Choice

Audits of financial statements are designed to obtain reasonable assurance of detecting material misstatements due to: $$\begin{array} { | c | c | c | } \hline & \text { Errors } & \text { Misappropriation of Assets } \\\hline \text { A. } & \text { Yes } & \text { Yes } \\\hline \text { B. } & \text { Yes } & \text { No } \\\hline \text { C. } & \text { No } & \text { Yes } \\\hline \text { D. } & \text { No } & \text { No } \\\hline\end{array}$$

• A) Option A
• B) Option B
• C) Option C
• D) Option D

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Definitions:

Specific Performance

A legal remedy requiring a party to perform a specific act, typically fulfilling a contract.

Fail to Close

A situation where a transaction or deal does not complete by the specified or agreed upon time.

Reduce Damages

Actions taken to minimize the amount of compensation required in a legal claim, often involving efforts to mitigate losses.

Breaches

Instances where parties fail to fulfill their obligations or violate the terms of a contract or agreement.