The Primary Source of Information That the Auditor Can Use

question 47

Multiple Choice

The primary source of information that the auditor can use in corroborating information about litigation,claims,and assessments is the ________.

• A)client's lawyer
• B)court records
• C)client's management
• D)independent auditor

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Definitions:

Investment Turnover

A measure of a company's efficiency in using its assets to generate sales or revenue, calculated by dividing sales by the average total assets.

DuPont Formula

A method that breaks down the return on equity into three component parts—profit margin, asset turnover, and financial leverage—to analyze a company's financial performance.

Return on Investment

A financial metric used to evaluate the efficiency or profitability of an investment, calculated by dividing the profit from an investment by its cost.

Investment Centers

Divisions or departments within a company responsible for generating revenue and controlling costs.