The Auditor Is Required to Communicate Certain Matters Related to the Audit

question 10

Multiple Choice

The auditor is required to communicate certain matters related to the audit to those charged with governance in the company.Which of the following items should be communicated to those charged with governance?

• A)deficiencies identified in internal controls over the financial statements
• B)other information in documents containing financial information
• C)disagreements with management
• D)consultation with other accountants
• E)issues discussed with management prior to retention
• F)both A and B
• G)both C and D
• H)both D and E

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Definitions:

Investing

The act of allocating resources, typically money, with the expectation of generating an income or profit over time through various instruments like stocks, bonds, or real estate.

Net Investment

The total amount of money spent on capital assets, minus depreciation. It reflects the increase in a company's or nation's capital stock.

Inventory Investment

Refers to the changes in the stock of goods that a company holds over a period, aiming to meet future sales demands or price changes.

Depreciation

An accounting method of allocating the cost of a tangible asset over its useful life, reflecting wear and tear, deterioration, or obsolescence.