Chapter 1 1 In the issuance of financial statements , what is management's responsibility , what is the auditor's responsibility The main items reported on an audit opinion ournalize income tax expense , including recording the income tax payable and any deferred tax liability or asset What is the relationship between income tax expense to net income Calculate earnings per share using average shares . What does EPS tell us ? To what class of stock is EPS attributable to ? know the classifications and order of a multi- step income statement . What items go into which section ( e . g . operations , other discontinued operations ) . How is having a multi - step income statement more useful than a single step know the purpose of each of the four financial statemen Is . What items go into Comprehensive Income ( i . e . Net Income + Other Comprehensive Income ( OCT ) items = Comprehensive Income ) Return on Equity ratio ( calculated the same way as ROA in Chapter 7 )