It Is Expected That the External Auditor Report the Following

question 58

Multiple Choice

It is expected that the external auditor report the following to the audit committee except:

• A)critical accounting policies and practices used by management
• B)materiality methodology and thresholds used by the auditor
• C)material alternative GAAP treatments that have been discussed with management
• D)material written communications between the auditor and management

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Definitions:

Fair Value

The estimated market value of an asset or liability, based on current conditions and informed market participant transactions.

Outstanding Common Stock

The shares of a corporation's common stock that are issued, sold, and actively held by investors, excluding any treasury stock.

Annual Amortization

The process of spreading the cost of an intangible asset over its useful life on a yearly basis.

Retained Earnings

The portion of net income left over for the business after it has paid out dividends to its shareholders, often reinvested in the business.