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kompoz [17]
2 years ago
10

The audit Mr. Chu is working on for a technology company is regulated. What does this mean?

Business
1 answer:
Aliun [14]2 years ago
7 0

It means that the technology company will use the audit results to analyze risks. Thus option A is correct.

<h3>What is Audit ?</h3>

Audit refers to the checking of financial records of the company in order to ensure that the records are systematic and accurate. It is very helpful for the outsiders such as creditors, shareholders, government agencies etc as it provides the accurate information about transactions.

Mr. Chu will analyse the financial statements of the technology company an conclude about the risk involved in the company. Thus it helps in analyzing the risk. Therefore, option A is correct.

Learn more about auditing here:

brainly.com/question/14652228

#SPJ1

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Sales $ 1,000,000 Net income $ 45,000 Current Assets $ 50,000 Fixed Assets $ 200,000 Total Assets $ 250,000 Current Liabilities
marishachu [46]

Answer:

Profit Margin = income / sales

45,000 / 1,000,000 = 4.5%

Return on Assets = income / assets

45,000 / 250,000 = 18%

Assets turnover = sales / assets

1,000,000 / 250,000 = 4

Earning per share: income / shares outstanding

45,000 / 40,000 = 1.125

Price- Earning ratio = market price / EPS

28 / 1.125 = 24,89

Return on Equity = income / equity*

45,000 / 120,000 = 37.5%

Debt to Equity ratio liab / equity

130,000 / 120,000 = 1,08

Explanation:

*solving for equity

Assets = laib + equity

250,000  =  130,000 + equity

equity = 120,000

5 0
3 years ago
Which of the following statements represent the appropriate directional relationships between the concepts of inherent risk, con
luda_lava [24]

Answer:

b. As inherent risk goes up, audit risk goes down.

Explanation:

Inherent risk is the risk which is present before applying any control, and audit risk is the that the auditor expresses inappropiate audit opinion when the financial statements are materialy misstated.

Thus, when the inherent risk is <em>high</em>, the auditor keeps the audit risk at <em>low </em>level to perform more subtantative procedures.

8 0
2 years ago
Suppose Ginger deposits $5,000 in cash into her checking account at the Bank of Skidoo. Show this transaction in a T-account for
Nutka1998 [239]

Answer:

1) Suppose Ginger deposits $5,000 in cash into her checking account at the Bank of Skidoo. Show this transaction in a T-account for the Bank of Skidoo.

Reserves                                                  Checkable deposits

debit             credit                                  debit             credit  

5,000                                                                             5,000

2) The Bank of Skidoo has no excess reserves and is subject to a 6 percent required reserve ratio. Assume the Bank of Skidoo makes the maximum loan possible from Ginger's deposit to Thurston. Show this transaction in a new T-account for the Bank of Skidoo.

Reserves                                                  Loans

debit             credit                                  debit             credit  

5,000                                                       4,700

<u>                      4,700</u>                            

300

3) Thurston decides to use the money he borrowed to purchase a sail boat. He writes a check for the entire loan amount to Gilligan's Seagoing Vessels, which deposits the check in its bank, the Paradise Bank of Kona, Hawaii. When the check clears, the Bank of Skidoo transfers the funds to the Paradise Bank. Show these transactions in a new T-account for the Bank of Skidoo.

Reserves                                                  Checkable deposits

debit             credit                                  debit             credit  

5,000                                                                             5,000

                     4,700                                  <u>4,700                      </u>

300                                                                                 300

<u>                      4,700 </u>

                     4,400

4) The maximum amounts of deposits that can be created from Ginger's initial deposit is $_____

Increase in checkable deposits = change in bank reserves / required reserves = $5,000 / 6% = $83,333.33

The maximum amounts of loans that can be created from Ginger's initial deposit is $_____

the maximum amount of loans that can be created in Ginger's bank is $4,700, but the maximum amount that loans can be created in the whole banking system = $83,333.33 - $5,000 = $78,333.33

3 0
3 years ago
Sip corp uses no debt. the weighted average cost of capital is 8 percent. if the current market value of the equity is 18 millio
grigory [225]

Since there is no debt, all the capital that the company raises is in the form of common equity.

Since there is only equity (meaning the firm is a fully equity firm), the weighted average cost of capital (WACC) is nothing but the cost of equity

In this case the WACC represents the cost of equity

Therefore, cost of equity = WACC = 8%

6 0
3 years ago
The "principal-agent problem" often arises in public choice when politicians pursue the best interests of their constituents
Gekata [30.6K]
<span>The "principal-agent problem" is when one person can make a decision on behalf of someone else that impacts the "principal". The agent works to favor the interests of the principal and receives incentives for doing so in return. The agent can get into a conflict of interest or make morally wrong decisions in favor of the principal they are helping. </span>
3 0
2 years ago
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