The CPA Canada Handbook Section "CAS 265: Communicating Deficiencies in Internal

question 17

Multiple Choice

The CPA Canada Handbook section "CAS 265: Communicating Deficiencies in Internal Control to Those Charged with Governance and Management" requires that ________.

• A)all misstatements are communicated to management in writing
• B)all significant control deficiencies and other deficiencies the auditor deems of sufficient importance,should be communicated to management
• C)only serious control risks uncovered are communicated to management in writing
• D)only frauds and illegal acts are communicated to management

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Definitions:

Units-of-Activity Method

A depreciation method where the expense is based on the number of units produced or the use of the asset, rather than the passage of time.

Double-Declining-Balance

An accelerated method of depreciation that doubles the normal depreciation rate to expense the asset more quickly.

Estimated Life

The expected duration over which an asset is likely to be useful or productive in its intended operation, used for depreciation purposes.

Straight-Line Depreciation

A method of allocating an asset's cost evenly across its useful life, resulting in the same depreciation expense each year.