The Auditor Learned the Following in the Course of an Audit

question 2

Multiple Choice

The auditor learned the following in the course of an audit engagement. Which of the items, discovered by the auditor, need NOT be communicated to the audit committee?

• A) The theft of several items of inventory by warehouse employees.
• B) Management's significant accounting policies.
• C) Significant audit adjustments recommended by the auditors.
• D) All of these items should be communicated to the audit committee.

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Definitions:

Loose Materials

Unconsolidated and uncompacted substances or objects, often used to describe soil, sand, or aggregate that is easily moved or reshaped.

Bedrock

The solid rock underlying loose deposits such as soil or alluvium, often exposed at the earth's surface or underlying younger sedimentary layers.

Mediterranean Sea

A sea connected to the Atlantic Ocean, surrounded by the Mediterranean region and almost completely enclosed by land.

Volcanic Eruption

A volcanic eruption is a geologic event during which magma (lava), gases, and ash are expelled from a volcano's vent to the surface.