Which of the following documentation is not required for an audit in accordance with auditing standards?
a. A written audit plan setting forth the procedures necessary to accomplish the audit's objectives
b. An indication that the accounting records agree or reconcile with the financial statements
c. A client letter that details the auditor's planned field work
d. The basis for the auditor's conclusions about the assessed risks of material misstatement
Ans: c. A client letter that details the auditor's planned field work
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How should research and development costs be accounted for, according to a Financial Accounting Standards Board Statement?
a. Must be capitalized when incurred and then amortized over their estimated useful lives. b. Must be expensed in the period incurred. c. May be either capitalized or expensed when incurred, depending upon the materiality of the amounts involved. d. Must be expensed in the period incurred unless it can be clearly demonstrated that the expenditure will have alternative future uses or unless contractually reimbursable.
The cost of common stock equity is ________
A) the cost of the guaranteed stated dividend expected by the stockholders B) the rate at which investors discount the expected dividends of the firm to determine its share value C) the after-tax cost of the interest obligations D) the historical cost of floating the stock issue