Which of the Following Is NOT Correct About the Audit

question 35

Multiple Choice

Which of the following is NOT correct about the audit discussion about the susceptibility of the entity's financial statements to material misstatement?

• A)the discussion must be done during the planning phase
• B)the purpose of the discussion is to allow audit team members gain a better understanding of the potential for misstatement
• C)the team determines the audit tests to mitigate the possibility of misstatements
• D)the discussion must be documented in the work papers

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Definitions:

Bond Discount

Bond Discount occurs when the bond's market price is below its face value, indicating that it was sold for less than its original value.

Issued

Refers to the number of shares that a corporation has sold to investors or otherwise put into circulation.

Straight-Line Method

A method of depreciation that allocates an equal amount of depreciation each year over the useful life of an asset.

Bond Discount

The difference between the face value of a bond and its selling price when the bond is sold for less than its face value.