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Questions and Answers
What is the primary allegiance of the external auditor for an audit of a company's financial statements?
What is the primary allegiance of the external auditor for an audit of a company's financial statements?
- stockholders, creditors, and the investing public (correct)
- the management of the audit client because the auditor is hired and paid by management
- the Auditing and Assurance Standards Council, because it determines auditing standards and auditor's responsibility
- the audit committee of the audit client because that committee is responsible for coordinating and reviewing all audit activities within the company
Which of the following would not represent one of the primary problems that would lead the users to demand for independent audits of a company’s financial statements?
Which of the following would not represent one of the primary problems that would lead the users to demand for independent audits of a company’s financial statements?
- The complexity of transactions affecting financial statements
- Management bias in preparing financial statements
- The remoteness of the user from the organization and thus the inability of the user to directly obtain financial information from the company
- The downsizing of business and financial markets (correct)
Which one of the following does not involve assurance services?
Which one of the following does not involve assurance services?
- implementing a system that improves the processing of information (correct)
- improving the quality of information for decision purposes
- improving the relevance of information
- improving the quality of the decision model used
Which concept is considered as the broadest and most inclusive?
Which concept is considered as the broadest and most inclusive?
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