The Existence of Audit Risk Is Recognized by the Statement

question 23

Multiple Choice

The existence of audit risk is recognized by the statement in the auditor's standard report that the auditor ________.

• A)obtains reasonable assurance about whether the financial statements are free of material misstatement
• B)assesses the accounting principles used and also evaluates the overall financial statement presentation
• C)realizes some matters,either individually or in the aggregate,are important while other matters are not important
• D)is responsible for expressing an opinion on the financial statements,which are the responsibility of management

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Definitions:

Rent Expense

The cost incurred by a business for leasing property or equipment used in operations, reflected as an expense on the income statement.

Double-Declining-Balance

An accelerated depreciation method that calculates depreciation at twice the rate of the straight-line method.

Depreciation

The systematic allocation of an asset's cost over its useful life, reflecting its decrease in value over time.

Periodic Depreciation Charge

A non-cash expense that allocates the cost of a tangible asset over its useful life on a regular basis.