An Auditor Should Expect That Fair Value Is the Price

question 31

Multiple Choice

An auditor should expect that fair value is the price that would be received to sell an asset in an orderly transaction between the market participants at the:

• A)Acquisition date of the asset.
• B)Audit report date.
• C)Expected replacement date of the asset.
• D)Measurement date (ordinarily the date of the financial statements).

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Definitions:

Precision

The quality of being exact, accurate, and careful about details.

Intolerance Of Error

A psychological state or organizational culture where mistakes are not tolerated, leading to high stress and potential stifling of creativity or learning.

Independent Variable

In an experiment, the variable that is manipulated or altered by the researcher to observe its effect on the dependent variable.

Dependent Variable

The variable in a study that is expected to change in response to changes in the independent variable, often measured to assess the effect of a treatment.