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AA Chapter 25 Questions

VIVA

 

Reader Interactions

Comments

  1. EmilyEze says

    September 19, 2021 at 2:53 pm

    In reference to question 3

    I seem to keep getting confused with the difference between the auditors responsibility to obtain reasonable assurance that the financial statements are free from material misstatements (whether due to fraud or error) and the responsibility to detect fraud, however material.

    How can you obtain reasonable assurance if you don’t detect material fraud???

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    • Kim Smith says

      September 20, 2021 at 8:00 am

      “however material” covers the entire spectrum of materiality including immaterial – i.e. “however material [or not]”.

      Please use the ASK the TUTOR forum with technical queries rather than this comments space.

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  2. today says

    May 29, 2020 at 9:02 am

    In quustion 2 ,why not the answer is report to police?

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    • Kim Smith says

      May 29, 2020 at 9:32 am

      I think you mean Q4. If you select “review quiz” you will see answer justifications (for incorrect as well as correct answers). As it says – it is for the company to report the matter to the police.

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  3. madniman14 says

    April 1, 2020 at 12:40 pm

    100% first time

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  4. theterror says

    February 27, 2020 at 5:37 pm

    what is asked in question 2?

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    • Kim Smith says

      February 28, 2020 at 7:59 am

      You are asked to select whether each of the four descriptions is an example of a fraud or an error.

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  5. gahiganafred1 says

    November 16, 2019 at 9:40 am

    I need detailed explanations of the difference between those charged with governance and management, this is because it confuses me so many times. Thank you,

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    • fawazt7 says

      November 24, 2019 at 12:02 pm

      Corporate hierarchy broadly is : Shareholders(owners) > Directors(top level management) > Operational managers > Employees

      Those charged with governance – Directors of the company; basically the ones directly reporting to shareholders and holding the responsibility of running the company & preparing the FS.

      Management – Personnel reporting to the directors and responsible for the day to day operations of business. Basically the lower level managers or divisional heads. Employees under specific departments would directly report to this level of management.

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    • Kim Smith says

      January 20, 2020 at 6:40 pm

      Here is a definition: Those charged with governance – The person(s) or organizations(s) (for example, a corporate trustee) with responsibility for overseeing the strategic direction of the entity and obligations related to the accountability of the entity. This includes overseeing the financial reporting process.
      So for a listed/public entity complying with a code of governance (.e.g UK Code), it will be the audit committee.
      For an unlisted company with no requirement for separate oversight management is charged with governance – so in the smallest of companies with only two directors (say) – they are responsible for the governance of the company.

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