The Auditor Uses Their Professional Judgment, Knowledge of the Client

question 14

True/False

The auditor uses their professional judgment, knowledge of the client and risk assessment
for each significant account to determine the timing and extent of testing.

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Definitions:

Total Excess Amortization

Refers to the amount of amortization that exceeds the net carrying value of the intangible asset being amortized.

Fair-Value Allocations

The process of assigning fair values to different assets and liabilities when a company is acquired, as part of the purchase price allocation.

Net Income

The net income a business earns following the deduction of all costs and taxes from its gross revenue.

Dividends

Profit payouts by a corporation to its shareholders, usually as a method of distributing earnings.