uncertainty?

Q: Explain how materiality differs for failure to follow GAAP and for lack of independence.

A: Generally Accepted Accounting Principles (GAAP): Generally Accepted Accounting Principles are the…

Q: What is directional test?

A: Audit: Audit is the process of verification of the compliance of the financial statements. It…

Q: What is the Tolerable Error Rate?

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Q: How is sensitivity analysis used to cope with uncertainty in decision making?

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Q: Why is it crucial to estimate the MARR correctly?

A: It is the minimum return rate on the project which an entity computes prior to the staring of the…

Q: What items could increase the risk of material misstatement?

A: Risk of material misstatement (ROMM) is a risk that the financial statements when audited will…

Q: When there is agreement between a measure or description and the phenomenon it purports to…

A: Financial accounting: Financial accounting is the process of recording, summarizing, and reporting…

Q: What is the relationship between tests of controls and substantive tests?

A: Audit Planning:   Audit planning is the first step in the auditing process. Auditor gathers all the…

Q: What can be understood by abnormal return?

A: Note firstly we understand what is meaning of abnormal return. Basic meaning of abnormal return is…

Q: What is the current approach embraced by standard setters in measurement and write its advantages…

A: Measurement is the manner of determining the quantitative values at which items of financial…

Q: When are analytical procedures required, and when are they optional?

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Q: What is risk? What is the difference between systematic and unsystematic risk?

A: Risk: Risk can be defined as upcoming uncertainty about variation from anticipated earnings or…

Q: Which answer below is the result of this error?

A: In the given case, the journal entry is recorded incorrectly. Due to which the service revenue will…

Q: What is the difference between covariance and correlation?

A: Co-variance: A co-variance is nothing but a descriptive measure of linear interaction intensity…

Q: is profile measurement and analysis? What are the limitations of this approach?

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Q: What is the purpose of a Limit Test?

A: Definition:   Limit test: It checks the data by evaluating it with the predetermined upper and…

Q: explain the relationship between hedging and measuring exposure.

A: Hedging is basically a type of risk management strategy through risk can be reduced significantly…

Q: Define certainty equivalent method

A: Certainty equivalent method: Certainty equivalent method is a risk analysis technique used in…

Q: What are the characteristics of Substantive Tests?

A: Audit Planning: Audit planning is the first step in the auditing process. Auditor gathers all the…

Q: Which of the following is incorrect regarding measurement period?

A: Business combinations are the result of acquisitions or mergers. Here, one party acquires the other…

Q: Define control risk and detection risk. What is the difference between control risk and detection…

A: Auditing:   In auditing, auditors verify the correctness and fair presentation of financial…

Q: What makes information irrelevant to decision making?

A: Irrelevant information is a part of the information collected for decision-making from various…

Q: s

A: Interim reporting : An interim statement is a financial report that covers a period of less than a…

Q: why to conduct feasivility study

A: Forecasting by financial analysts assists management in determining appropriate ways to attain the…

Q: What do "threat," "vulnerability," and "risk" really mean?

A: Threat : A declaration of purpose to cause someone pain, harm, damage, or other hostile action as…

Q: Why is the reporting of segment information required? Justify your response. Why is the reporting of…

A: Segment reporting deals with in-detail segment-wise financial reporting in the financial statements…

Q: What is the meaning of “statistically significant” in relation to the null hypothesis?

A: Null hyptohesis is the assumption of no effect or no relationship between variables. The Null…

Q: Does the MM theory appear to be correct according to either empirical research or observations…

A: The question is based on the concept of Modigliani Miller (MM) approach of capital structure and…

Q: Explain Measures of Variance and Risk?

A: Variance tests normal or normal variability. Variability is volatility for investors, and volatility…

Q: What would the effect of the failure in the ratio measurement?

A: Ratio measurement in terms of financial world depicts that a single accounting figure by itself may…

Q: How are the sufficiency and appropriateness of evidence related to detection risk?

A: Audit Evidence:   The pieces of evidence provided by the audit team to prove their opinion with…

Q: How does the source of evidence affect its reliability?

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Q: What is an uncorrected misstatement?

A: Auditing:   Auditing refers to an independent examination of financial information of any…

Q: What is the difference in a data and findings?

A: Data is the combination of raw facts which is used for providing information and conclusions to the…

Q: What is a MIS report, why is it  prepared?

A: MIS is Management Information System. Management information system is an integrated collection of…

Q: what are Audit Assumption

A: Answer: The audit that is conducted is such that there are assumptions made.

Q: What are going-concern uncertainties?

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Q: Which of the following is NOT a characteristic of effective information? a. relevance b. accuracy c.…

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Q: Answer of the following question related to these characteristics and constraints. When there is…

A: Financial accounting: Financial accounting is the process of recording, summarizing, and reporting…

Q: Why "ollectivity of evidence" is "high" for "pliysicai examination" evidence?

A: The objectivity of evidence depends upon the viability of internal control, now the…

Q: Explain what is meant by the audit expectation gap.

A: Audit expectation gap refers to the difference between public expectation about the auditor's role…