The auditor should obtain sufficient appropriate evidence for material amounts and disclosures in the financial statements that are determined by laws and regulations that have a direct impact on the financial statements.Examples include
A)SEC reporting requirements for public companies
B)FASB reporting requirements for public companies
C)industry specific management reporting issues
D)recording transactions under government contracts,including the amount of revenue to be accrued
E)the accrual and recognition of income tax and pension expense
F)both A and B
G)both A and E
H)both C and D

Question

Quizplus · Accepted Answer

The best choice is G because it includes laws and regulations with a direct impact on financial statements such as SEC reporting requirements for public companies and the accrual and recognition of income tax and pension expense. This choice covers both government regulations and accounting principles. Choices A and B only cover reporting requirements for public companies, while choices C and D are specific to certain industries and government contracts, respectively.

The Auditor Should Obtain Sufficient Appropriate Evidence for Material Amounts