Which of the Following Statements Are True

question 61

Multiple Choice

Which of the following statements are true?
I. The introductory paragraph states that management is responsible for the preparation and content of the financial statements.
II. The scope paragraph states that the auditor evaluates the appropriateness of those accounting principles, estimates, and financial statement disclosures.

• A) I only
• B) II only
• C) I and II
• D) Neither I nor II

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Definitions:

CAFR

Comprehensive Annual Financial Report, detailed financial report used by governments to provide a full overview of financial status.

Incremental Borrowing Rate

The interest rate a lessee would have to pay to borrow on a collateralized basis over a similar term to lease a similar asset.

Implicit Interest Rate

The interest rate inferred from the lease payments in a leasing agreement, indicating the cost of borrowing over the lease term.