Question

Which of the following most likely would cause an auditor to consider whether a clients financial statements contain materia
0 0
Add a comment Improve this question Transcribed image text
Answer #1

The correct answer is:-

d) The results of an analytical procedure disclose unexpected differences.

The analytical procedure can include ratio analysis or trend analysis. Assuming auditor is expected the current ratio to be near 1 but the ratio results near 2, this would imply that their might exist some hidden data that needs to be delved into further and could possibly contain a material misstatement.

Add a comment
Know the answer?
Add Answer to:
Which of the following most likely would cause an auditor to consider whether a client's financial...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • Which of the following matters would an auditor most likely consider to be a significant deficiency to be communicated to the audit committee

    1. Which of the following matters would an auditor most likely consider to be a significant deficiency to be communicated to the audit committee? A. Management's failure to renegotiate unfavorable long-term purchase commitments.B. Recurring operating losses that may indicate going concern problems.C. Evidence of a lack of objectivity by those responsible for accounting decisions.D. Management's current plans to reduce its ownership equity in the entity. 2. After obtaining an understanding of internal control and arriving at a preliminary assessed level...

  • 4. The . Which of the following circumstances is most likely to cause an auditor to...

    4. The . Which of the following circumstances is most likely to cause an auditor to increase the assessment of the risk of material nt of the financial statements due to traud) 1. Property and equipment are usually sold at a loss before being fully depreciated O 2. Unusual discrepancies exist between the entity's records and confirmation replies 3. Monthly bank reconalatons usually include several in transit items, 4. Clerical errors are listed on a computer-generated exception report

  • 22. Which of the following factors most likely would heighten an auditor's concern about the risk...

    22. Which of the following factors most likely would heighten an auditor's concern about the risk of fraudulent financial reporting? a..The audit committee's approval of the initial selection of accounting principles. b..A lack of competition in the entity's industry, accompanied by increasing profit margins. c..Management's disclosure of unresolved litigation and contingent liabilities. d..Year-end adjustments by the entity that significantly affect financial results 23. Which of the following factors most likely would cause an accountant not to accept an engagement to...

  • In which of the following circumstances would an auditor most likely add an "emphasis of matter"...

    In which of the following circumstances would an auditor most likely add an "emphasis of matter" paragraph to the auditor's report without changing the unmodified opinion? A. The auditor is asking to report on the balance sheet, but not the other basic financial statements. B. Management changed from one accepted accounting principal to another accepted accounting principal and accounted properly for the effects of the change as required by GAAP. C. Certain transactions cannot be tested because of management's records...

  • (TCO H) Which of the following expressions most likely would be included in a management representation...

    (TCO H) Which of the following expressions most likely would be included in a management representation letter? 1. We do not intend to provide any information that may be construed to constitute a waiver of the attorney-client privilege. 2. There are no significant deficiencies in internal control identified during the prior-year's audit of which those charged with governance are unaware. 3. Certain computer files and other required audit evidence may exist only for a short period of time and only...

  • 25-20 (Objective 25-8) The following questions concern reports issued by auditors, other than those on historical...

    25-20 (Objective 25-8) The following questions concern reports issued by auditors, other than those on historical financial statements. Choose the best response. a. An auditor is reporting on cash basis financial statements. These statements are best referred to in the opinion of the auditor by which of the following descriptions? (1) Cash receipts and disbursements and the assets and liabilities arising from cash transactions. (2) Financial position and results of operations arising from cash transactions. (3) Balance sheet and income...

  • Which of the following conditions or events most likely would cause an auditor to have substantial...

    Which of the following conditions or events most likely would cause an auditor to have substantial doubt about an entity's ability to continue as a going concern? A. Management has postponed selected research and development projects during a general economic recession. B.. The entity has engaged in material related party transactions. C. The board of directors declares a stock dividend instead of a cash dividend. D. Cash flows from operating activities are negative.

  • You are the auditor of Sika Pa Rural Bank Ltd. a non-listed rural bank in Ghana....

    You are the auditor of Sika Pa Rural Bank Ltd. a non-listed rural bank in Ghana. You are currently finalizing the audit for the year ended 31 December 2019. Your audit tests have proved satisfactory with the exception of the following four matters (a) The year-end balance of short-term investments of GHS 12.500.000 includes an amount of GHS 7,000,000 with Gold Coast Securities Lid which matured on 14" March, 2018 but has not yet been received to the date of...

  • 5-1 -2 -4 545. Multiple Choice Questions Select the best answer for each of the following...

    5-1 -2 -4 545. Multiple Choice Questions Select the best answer for each of the following questions. Explain the reasons for your selection a. Which of the following is not a financial statement assertion made by management? (1) Existence of recorded assets and liabilities. (2) Completeness of recorded assets and liabilities. (3) Valuation of assets and liabilities. (4) Effectiveness of internal control b. Which of the following business characteristics is not indicative of high inherent risk? (1) Operating results that...

  • For each of the following independent cases, state the highest level of deficiency that you believe...

    For each of the following independent cases, state the highest level of deficiency that you believe the circumstances represent—a control deficiency, a significant deficiency, or a material weakness. Explain your decision in each case. CASE 1 The company processes a significant number of routine intercompany transactions. Individual intercompany transactions are not material and primarily relate to balance sheet activity—for example, cash transfers between business units to finance normal operations. A formal management policy requires monthly reconciliation of intercompany accounts and...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT