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

question 21

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 audited financial statements
• C)agreements with management
• D)consultation with other accountants
• E)issues discussed with management after retention
• F)both A and C
• G)both B and D
• H)both D and E

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Definitions:

Bearing Risk

The action or practice of assuming the potential for loss or danger in a financial operation or investment.

Dollar Return

The total amount of money gained or lost on an investment, expressed in dollars.

Preferred Stock

A class of ownership in a corporation with a specified dividend that is paid out before dividends to common stockholders and typically does not carry voting rights.

Annual Dividend

The total dividend payment a shareholder receives from a company in one year, often expressed as an amount per share.