The Preface to the Auditing Standards Describes the Fundamental Principles

question 65

Multiple Choice

The Preface to the Auditing Standards describes the fundamental principles that govern an audit.According to these principles,the purpose of an audit is

• A)to provide reasonable assurance that there are no misstatements in the financial statements
• B)to plan the audit to provide reasonable assurance of detecting fraud
• C)to ensure that the financial statements are fairly presented
• D)to increase the level of confidence that outsiders place in the financial statements

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Definitions:

Wages

Payments made to workers for their labor or services, typically calculated on an hourly, daily, or piecework basis.

Salaries

Fixed regular payments made by employers to employees, typically on a monthly or biweekly basis, in exchange for their work.

Wage Supplements

Additional benefits or payments made to employees on top of their regular wages, such as health insurance, retirement contributions, or bonuses.

Personal Income

The total earnings received by individuals, including wages, salaries, and other forms of income.