10) Financial statements that understate the results almost never lead to legal action by financial 5 Points True O False 11) Loss contingencies should be reflected in the financial statement amounts when: It is probable that a loss had been sustained before the balance sheet date. The amount of the loss can be reasonably estimated. 5 Points False True 12) The substantive procedure for payroll that tests computations of compensation under profit-sharing or bonus plans provides evidence for which primary audit objective? 5 Points O Existence and occurance Accuracy O Completeness 13) Testing whether employee time reports are approved by supervisors is an example for which of the following audit items? 5 Points O Substantive procedures O Analytical procedures O Test of controls 14) A possible loss, stemming from past events that will be resolved as to the existence and amounts, is referred to as a(n): 5 Points O Unasserted claim Probable loss Loss contingency