For Laws with an Indirect Impact on the Financial Statements

question 23

Multiple Choice

For laws with an indirect impact on the financial statements the auditor should perform audit procedures to identify instances on noncompliance with laws and regulations that may have a material effect on the financial statements.The auditor does this by

• A)inquiring with management about the company's compliance with laws and regulations
• B)reviewing regulations of relevant licensing or regulatory bodies
• C)corresponding with relevant licensing or regulatory bodies
• D)inspecting correspondence with relevant licensing or regulatory bodies
• E)both A and B
• F)both A and D
• G)both C and E

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Definitions:

Smooth Muscle

A type of muscle tissue which is not under voluntary control and is found in the walls of internal organs.

Cardiac Muscle

A specialized type of muscle found only in the heart, characterized by its ability to contract involuntarily and rhythmically.

Neuromuscular Junctions

Specialized synapses between motor neurons and skeletal muscle fibers, crucial for initiating muscle contraction.

Skeletal Muscle

A type of striated muscle tissue which is under the voluntary control of the somatic nervous system; it is used to facilitate movement by applying force to bones and joints via contraction.