Much of the Information Regarding Material Misstatement in the Company

question 44

Multiple Choice

Much of the information regarding material misstatement in the company is obtained from management.However,the auditor may find it useful to talk to employees at different levels of authority such as

• A)individuals charged with department governance
• B)internal department personnel who perform internal controls
• C)in-house legal counsel regarding the risk of litigation
• D)employees in the shipping or receiving department

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Definitions:

Book Value per Share

A financial measure that indicates the theoretical value per share of a company if it were to liquidate, calculated by dividing total equity by the number of outstanding shares.

Price-earnings Ratio

A valuation metric for companies, calculated by dividing the current market price of a stock by its earnings per share (EPS).

Dividend Yield Ratio

A financial ratio that indicates how much a company pays out in dividends each year relative to its stock price, typically expressed as a percentage.

Earnings per Share

A financial ratio that measures the amount of net income earned per share of common stock. It is an indicator of a company's profitability.