Indicate Whether You Agree or Disagree with the Following Statements

question 12

Essay

Indicate whether you agree or disagree with the following statements and explain your reasoning.
a) Rejean Tremblay feels that an internal auditor that reports to the chief financial officer of the company can be as independent as an auditor that reports to the audit committee.
b) Angela Pelletier discovered a very material overstatement in the financial statements of McKenzie Growth. She felt that the misstatement would have an impact on the decisions of users of the financial statements, and indicated to her audit senior that she would be including it as an "emphasis of matter" paragraph in the audit report.
c) An auditor is responsible for the preparation and fair presentation of the financial statements in accordance with International Financial Reporting Standards, and for such internal control as is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
d) An assurance engagement involves evaluation or measurement of subject matter against criteria.

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Definitions:

Random Walk Theory

The theory that current stock prices already reflect known information about the future. Therefore, the future movement of stock prices will be determined by surprise occurrences. This will cause them to change in a random fashion.

Stock Prices

The current market price of a company's shares, determined by supply and demand factors in the stock market.

Beginning Investors

Individuals who are new to investing, typically requiring guidance and learning about investment strategies and market principles.

Average Real Rate Of Return

The annualized rate of return on an investment, adjusted for inflation, reflecting the actual buying power of the returns.