. Which of the following is not a typical note included in an annual report? O A. A note describing financial disclosures about items not appearing in the financial statements. B. A note describing the auditor's opinion of the management's past and future financial planning for the business. O C. A note providing more detail about a specific item shown in the financial statements. O D. A note describing the accounting rules applied in the financial statements.

. Which of the following is not a typical note included in an annual report? O A. A note describing financial disclosures about items not appearing in the financial statements. B. A note describing the auditor's opinion of the management's past and future financial planning for the business. O C. A note providing more detail about a specific item shown in the financial statements. O D. A note describing the accounting rules applied in the financial statements.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Which of the following does NOT explain the distinction between financial statements andmanagement accounts?A Financial statements are primarily for external users and management accounts areprimarily for internal usersB Financial statements are normally produced annually and management accounts arenormally produced monthlyC Financial statements are more detailed than management accountsD Financial statements are audited by an external auditor and management accounts do notnormally have an external audit
Subsequent events for reporting purposes are defined as events that occur subsequentto the(1) balance sheet date but before the date of the auditor’s report.(2) date of the auditor’s report.(3) balance sheet date.(4) date of the auditor’s report and concern contingencies that are not reflected inthe financial statements.
An auditor issues a report dated 2/12/Year 2 on financial statements for the year ended 12/31/Year 1. Which best describes the auditor's responsibility for an event occurring on 2/1/Year 2 and an event occurring on 3/1/Year 27 A. The auditor has an active responsibility to investigate both events. B. The auditor has an active responsibility to investigate the 2/1/Year 2 event, but no responsibility concerning the 3/1/Year 2 event. C. The auditor has an active responsibility to investigate the 2/1/Year 2 event, and must also consider the effect of the 3/1/Year 2 event if it comes to his/her attention. D. The auditor has no responsibility for either event, since both occur after the date of the financial statements.
Independent auditors of financial statements perform audits that reducea. Business risks faced by investors.b. Information risk faced by investors.c. Complexity of financial statements.d. Timeliness of financial statements
How is the auditors’ responsibility for expressing the opinion on financial statements disclosed in the standard (unmodified) report for a nonpublic company?a. Stated explicitly in the Auditor’s Responsibility section.b. Unstated but understood in the Auditor’s Responsibility section.c. Stated explicitly in the opinion paragraph.d. Stated explicitly in the introductory paragraph.
Which of the following is NOT a major component of the Sarbanes-Oxley Act? Executive responsibility for accurate financial reporting. Accounting regulation. Mandating external financial audits for all companies. Formation of an audit committee.
Which of the following statements relating to the role ofprofessional judgment in the financial reporting process is(are) true?a. Different accountants may evaluate similar situationsdifferently.b. The determination of which items should be disclosedin notes to fi nancial statements requires professionaljudgment.c. Once a complete list of generally accepted accountingprinciples is prepared, judgment by accountants will nolonger enter into the fi nancial reporting process.d. The possibility exists that professional judgment latermay prove to have been incorrect.
How can an auditor use the following topic in his future work? Evaluate financial decision-making to ensure compliance with accounting standards, rules, and regulations. Apply Generally Accepted Accounting Principles (GAAP) to record financial information. Analyze financial statements to inform current business decision-making and draw conclusions about the financial health of a company. Recommend budget planning strategies based on the financial performance of a company.