Significant Findings Are to Be Documented by the Auditor,including Actions

question 35

Multiple Choice

Significant findings are to be documented by the auditor,including actions taken to address them and the basis for the final conclusion reached.Findings that might be significant include

• A)accounting for complex or unusual transactions or accounting estimates or uncertainties
• B)results of audit procedures indicating that the financial statements or disclosure could be materially misstated or the need for an auditor to revise his previous assessment of the risk of material misstatement
• C)circumstances that made it relatively easy for the auditor to apply auditing procedures
• D)findings that could result in modifications to management's report
• E)adjustments that the auditor has made to the financial statements
• F)both A and B
• G)both C and D

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Definitions:

Straight-line Method

A method of calculating depreciation which spreads the cost of an asset evenly across its useful life.

Accumulated Depreciation

The cumulative sum of depreciation costs charged to a fixed asset from the time of its purchase.

Gain or Loss

The financial result of disposing or selling an asset or investment, measured by the difference between the sale price and the asset's book value.

Equipment

Tangible assets used in the operation of a business to produce goods or provide services, such as machinery, computers, or tools.