Which of the Following Is Not Required to Be Communicated

question 30

Multiple Choice

Which of the following is not required to be communicated to the audit committee or similarly designated body under auditing standards?

• A) Disagreements with the company over two acceptable accounting treatments for a significant transaction.
• B) Disagreements with management about the scope of the audit, applicability of accounting principles, or wording of the audit report.
• C) Difficulties encountered in performing the audit, such as lack of availability of client personnel and failure to provide necessary information.
• D) Auditor's responsibilities under generally accepted auditing standards, including responsibility for evaluating internal control and the concept of reasonable rather than absolute assurance.

---

Definitions:

Variable Selling Expense

Expenses that vary with sales volume, including commissions and shipping charges.

Fixed Selling Expense

Costs associated with selling which remain constant regardless of the level of sales.

Variable Administrative Expense

Costs that vary with changes in the level of an organization's activity, related to administrative functions.

Contribution Margin

The revenue remaining after subtracting variable costs, which can then be used to cover fixed expenses and provide profit.