In a review engagement, the accountant must make all of the following inquiries except those to:
A. Understand internal controls.
B. Ascertain whether statements are in accordance with GAAP.
C. Identify actions taken at stockholders' meetings.
D. Identify subsequent events having a material effect on the statements.
Answer: A
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Which of the following is a technique for ranking items in a group based on the value, activity, sales, or other relevant metric for the items?
a. cyclical reordering b. reorder point analysis c. EOQ models d. ABC analysis
The principle behind the percentage-of-sales method of budget setting is viewing sales as the result of advertising
Indicate whether the statement is true or false
The highest level of work breakdown structure is the:
A) Project. B) Deliverable. C) Subdeliverable. D) Work package.
Your friend Ricky took a finance class and learned about the risk-return trade-off. Wanting a high return, Ricky
invested in a risky, start-up technology company. A year later the company went bankrupt and Ricky lost his entire investment. Ricky is furious with his finance professor for misleading him, claiming he was taught that higher return goes with higher risk. Explain how Ricky misinterpreted the risk-return trade-off.