Question

The following factors make the investment/finance cycle difficult to audit (select all that apply): (A.) GAAP...

The following factors make the investment/finance cycle difficult to audit (select all that apply):

(A.) GAAP for the areas in this cycle are the most complex

(B). Board of directors are involved in management activities rather than just governance

(C) Accounting for areas like stock compensation, derivatives, marketable securities and others involves estimates and judgments to be made by management.

(D) Since substantive testing is too difficult, auditors rely more on complex internal controls.

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Answer #1

Ans: Option C

Accounting for areas like stock compensation, derivatives, marketable securities and others involves estimates and judgments to be made by management.

Explanation: Depending on auditors judgement and management judgement it may vary so

factors make the investment/finance cycle difficult to audit is Accounting for areas like stock compensation, derivatives, marketable securities and others involves estimates and judgments to be made by management.

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