Business risk is the risk that business may discontinue or may suffer losses due to the circumstances. The auditor should assess these risks because it may affect the going concern assumption of accounting. To indicate: The business risk for entity operating in coal mine.

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Answer 1

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Chapter 4, Problem 4.7RQ

To determine

Concept Introduction:

Business risk is the risk that business may discontinue or may suffer losses due to the circumstances. The auditor should assess these risks because it may affect the going concern assumption of accounting.

To indicate:The business risk for entity operating in coal mine.

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Presented below is a note disclosure for Matsui Corporation. Litigation and Environmental: The Company has been notified, or is a named or a potentially responsible party in a number of governmental (federal, state and local) and private actions associated with environmental matters, such as those relating to hazardous wastes, including certain sites which are on the United States EPA National Priorities List (“Superfund”). These actions seek clean-up costs, penalties and/or damages for personal injury or to property or natural resources. In 2020, the Company recorded a pre-tax charge of $56,229,000, included in the “Other expense (income)—net” caption of the Company’s consolidated income statements, as an additional provision for environmental matters. These expenditures are expected to take place over the next several years and are indicative of the Company’s commitment to improve and maintain the environment in which it operates. At December 31, 2020, environmental accruals amounted…

If a corporation may be violating federal and state laws governing environmental concerns, which one of the following types of audit will best assist in ascertaining whether such situations may exist?

(b)A waste disposal company has breached tax regulations, environmental regulations and health and safety regulations. The auditor has been approached by the tax authorities, the government body supervising the award of licences to such companies and a trade union representative. All of them have asked the auditor to provide them with information about the company. The auditor has also been approached by the police. They are investigating a suspected fraud perpetrated by the managing director of the company and they wish to ask the auditor certain questions about him. Required: Describe how the auditor should respond to these types of request.

Answer 2

Question

Chapter 4, Problem 4.7RQ

To determine

Concept Introduction:

Business risk is the risk that business may discontinue or may suffer losses due to the circumstances. The auditor should assess these risks because it may affect the going concern assumption of accounting.

To indicate:The business risk for entity operating in coal mine.

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Answer 3

Question

Chapter 4, Problem 4.7RQ

To determine

Concept Introduction:

Business risk is the risk that business may discontinue or may suffer losses due to the circumstances. The auditor should assess these risks because it may affect the going concern assumption of accounting.

To indicate:The business risk for entity operating in coal mine.

Expert Solution & Answer

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Answer 4

Question

Chapter 4, Problem 4.7RQ

To determine

Concept Introduction:

Business risk is the risk that business may discontinue or may suffer losses due to the circumstances. The auditor should assess these risks because it may affect the going concern assumption of accounting.

To indicate:The business risk for entity operating in coal mine.

Expert Solution & Answer

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Answer 5

Chapter 4, Problem 4.7RQ

To determine

Concept Introduction:

Business risk is the risk that business may discontinue or may suffer losses due to the circumstances. The auditor should assess these risks because it may affect the going concern assumption of accounting.

To indicate:The business risk for entity operating in coal mine.

Answer 6

Chapter 4, Problem 4.7RQ

To determine

Concept Introduction:

Business risk is the risk that business may discontinue or may suffer losses due to the circumstances. The auditor should assess these risks because it may affect the going concern assumption of accounting.

To indicate:The business risk for entity operating in coal mine.

Answer 7

Chapter 4, Problem 4.7RQ

To determine

Concept Introduction:

Business risk is the risk that business may discontinue or may suffer losses due to the circumstances. The auditor should assess these risks because it may affect the going concern assumption of accounting.

To indicate:The business risk for entity operating in coal mine.

Answer 8

Expert Solution & Answer

Answer 9

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Answer 10

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Answer 11

Ch. 4 - Prob. 4.1RQ Ch. 4 - Prob. 4.2RQ Ch. 4 - Prob. 4.3RQ Ch. 4 - Prob. 4.4RQ Ch. 4 - Prob. 4.5RQ Ch. 4 - Prob. 4.6RQ Ch. 4 - Prob. 4.7RQ Ch. 4 - Prob. 4.8RQ Ch. 4 - Prob. 4.9RQ Ch. 4 - Prob. 4.10RQ

Business risk is the risk that business may discontinue or may suffer losses due to the circumstances. The auditor should assess these risks because it may affect the going concern assumption of accounting. To indicate: The business risk for entity operating in coal mine.

Solution Summary: The author explains that business risk affects the going concern assumption of accounting. An entity operating in coal mine may face sudden closure of business due to accident or governments order to close the mine.

Concept Introduction:

Business risk is the risk that business may discontinue or may suffer losses due to the circumstances. The auditor should assess these risks because it may affect the going concern assumption of accounting.

To indicate:The business risk for entity operating in coal mine.

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Chapter 4 Solutions

Business risk is the risk that business may discontinue or may suffer losses due to the circumstances. The auditor should assess these risks because it may affect the going concern assumption of accounting. To indicate: The business risk for entity operating in coal mine.

Solution Summary: The author explains that business risk affects the going concern assumption of accounting. An entity operating in coal mine may face sudden closure of business due to accident or governments order to close the mine.

Concept Introduction: Business risk is the risk that business may discontinue or may suffer losses due to the circumstances. The auditor should assess these risks because it may affect the going concern assumption of accounting. To indicate:The business risk for entity operating in coal mine.

Want to see the full answer?

Chapter 4 Solutions

Concept Introduction:

Business risk is the risk that business may discontinue or may suffer losses due to the circumstances. The auditor should assess these risks because it may affect the going concern assumption of accounting.

To indicate:The business risk for entity operating in coal mine.