The GAAS General Standard Relating to the Audit of Financial

question 12

Multiple Choice

The GAAS general standard relating to the audit of financial statements focuses on all of the following except ________.

• A) competence
• B) independence
• C) due professional care
• D) planning

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Definitions:

Incremental Cash Flow

The additional cash flow from a company's activities or projects, specifically distinguishing between the cash flows with and without the project.

Taxes

Compulsory financial charges or levies imposed by a government on individuals and organizations to fund public expenditures.

Erosion

The portion of cash flows of a new project that come at the expense of a firm’s existing operations.

Incremental

Refers to the additional changes in costs or revenues that result from a business decision.