1.______________ in the valuation of assets means that when two (or more) reasonable alternative values are indicated, the accountant will choose the lower amount.

2._________________, by its very nature, is a mixture of minor items, some nonrecurring and others likely to be received at irregular intervals. 3.An effective _________ program will reduce the risk of material misstatement because budgets provide management with information as to expected amounts.

4.The payroll in many companies is the largest _____________ cost and therefore deserves the close attention of management as well as the auditors.

5.Still another reason for emphasizing the importance of ____________________ over payroll is the existence of various payroll tax and income tax laws that require that certain payroll records be maintained and that payroll data be reported to the employee and to governmental agencies.

6.Because of the complex requirements relating to payroll (e.g., withholding employee taxes, making health and pension plan contributions, issuing W-2 forms, filing other required government forms), many companies _____________ the payroll function. 7.__________________ is prepared from other financial statements and from analyses of increases and decreases in selected account balances. The amounts included in the statement of cash flows are audited in conjunction with the audit of balance sheet and income statement accounts

8.The auditors ______________ on the financial statements is based on all evidence gathered by the auditors up to the date of the audit report and any other information that comes to their attention between that date and the issuance of the financial statements.

9.__________________ may be defined as a possible loss, stemming from past events that will be resolved as to existence and amount by some future event. Central to the concept of this is the idea of uncertaintyuncertainty as to both the amount of loss and whether, in fact, any loss has been incurred.

10.In addition to loss contingencies and commitments, all businesses face the risk of loss from numerous factors called ________________ that are representing losses that might occur in the future, as opposed to loss contingencies that might have occurred in the past.

A.	internal control
B.	general risk contingencies
C.	conservatism
D.	a loss contingency
E.	opinion
F.	budgeting
G.	the statement of cash flows
H.	outsource
I.	operating
J.	miscellaneous revenue