The Auditor Must Communicate in Writing All Significant Deficiencies and Material

question 40

Multiple Choice

The auditor must communicate in writing all significant deficiencies and material weaknesses to management and the audit committee.The written communication from the auditor should include:

• A)a definition of a significant deficiency and a material weakness
• B)a statement that the objective of the audit is to report on the financial statements and to provide assurance on internal controls
• C)a statement that the communication is intended solely for the use of stockholders,the board of directors,the audit committee,and management
• D)a statement that there is no such thing as absolute assurance

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Definitions:

Producer Surplus

The difference between what producers are willing to sell a good for and the market price they actually receive.

Negotiated Price

The final price agreed upon by the buyer and seller after discussions or bargaining, reflecting both parties' interests.

Dominant Strategy

is a strategy that yields the best outcome for a player, regardless of the opponent's actions, in game theory and economic analysis.

Rebate

A partial refund to someone who has paid too much for tax, rent, or a utility.