What are the four things required of an auditor to obtain reasonable assurance that are outlined in the Performance section of the Principles Underlying an Audit Conducted in Accordance with GAAS?
What will be an ideal response?
- Plans the work and properly supervises any assistants.
- Determines and applies appropriate materiality level or levels throughout the audit.
- Identifies and assesses risks of material misstatement, whether due to fraud or error, based on an understanding of the entity and its environment, including the entity's internal control.
- Obtains sufficient appropriate audit evidence about whether material misstatements exist, through designing and implementing appropriate responses to the assessed risks.
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A capital stock subscription is an agreement in which a buyer contracts to buy shares of stock from a corporation at a specific price
Indicate whether the statement is true or false
When an organization acquires products made abroad and sells them domestically, it indulges in ________.
A. global sourcing B. licensing C. importing D. franchising
On January 4, Year 1, Barber Company purchased 5,000 shares of Convell Company for $59,500 plus a broker's fee of $1,000. Convell Company has a total of 25,000 shares of common stock outstanding and it is presumed the Barber Company will have a significant influence over Convell. During each of the next two years, Convell declared and paid cash dividends of $0.85 per share, and its net income was $72,000 and $67,000 for Year 1 and Year 2, respectively. The January 12, Year 3, entry to record Barber's sale of 3,000 shares of Convell Company stock, which represents 60% of Barber's total investment, for $39,000 cash should be:
A. Debit Cash $39,000; debit Loss on Sale of Investment $8,880; credit Equity Method Investments $47,880. B. Debit Cash $39,000; debit Loss on Sale of Investment $21,500; credit Equity Method Investments $60,500. C. Debit Cash $39,000; credit Gain on Sale of Investment $2,700; credit Equity Method Investments $36,300. D. Debit Cash $39,000; credit Gain on Sale of Investment $8,750; credit Equity Method Investments $30,250. E. Debit Cash $39,000; debit Loss on Sale of Investment $8,200; credit Equity Method Investments $47,280.
Jennifer has offered to sell her laptop computer for $750 to Jack. She tells Jack that the computer is only six months old but, in fact, it is three years old, and Jennifer wants to unload the lemon. Jack agrees to buy the computer based on Jennifer's representations. This contract is A) a void agreement because of the fraud involved
B) a voidable contract, one that Jack can void. C) a voidable contract, because it is unilateral. D) a void contract because of the UCC.