Conservatism in the measurement of income includes the following:

• Assets should have the higher values
• Liabilities should have the lower amount chosen
• Income statement results with lower income figure

Group of answer choices

True

False

All of the following are required to be communicated with the board or the designated committee, except for:

Group of answer choices

Disagreements with management during the audit.

The necessity for conservatism in the financial statements.

An overview of the planned scope and timing of the audit.

Uncorrected misstatements from the audit.

Below are the summarized results from performing the test count and price testing for inventory. Select the best possible action based on the below.

Auditor findings:

• Counted 100 units of Widget A
• Vendor's invoice indicates $12.00 per unit of Widget A

Client's final inventory records:

• Widget A quantity at 100 units
• Widget A value recorded as $14.00 per unit

Group of answer choices

Exception with quantity, propose a decrease in value adjustment.

Not an exception, no further audit work is necessary.

Exception with value in price test, propose an increase in value adjustment.

Exception with value in price test, propose an reduction in value adjustment.

Which is the primary audit objective most directly addressed in the following procedure:

The auditor performs tests on the reconciling items within the clients bank reconciliation, tracing items to the bank cut-off statement to see when the item has cleared.

Group of answer choices

Presentation and disclosure

Completeness & Cut-off

Rights & Obligations

Valuation