True/False Questions
- AICPA professional standards identify “published price quotations in an active market” as the best indicator of fair value.
2. An auditor’s substantive procedures may include developing independent fair value estimates to corroborate an entity’s fair value measurements.
3. AICPA professional standards identify “published price quotations in an active market” as the best indicator of fair value.
4. GAAP requires fair value measurements to be based on published price quotations in an active market.
5. When there are no observable market prices, the auditor should modify the opinion for a scope limitation.
6. Auditors are prohibited from engaging a specialist to assist with the evaluation of an entity’s fair value measurements and disclosures.
7. Auditors ordinarily do not discuss fair value measurements and disclosures with an entity’s audit committee, since the subject matter is inherently subjective.
8. An auditor is responsible for determining whether the fair value measurements and disclosures associated with an entity’s financial statements comply with the requirements of the financial reporting framework applicable to the entity’s financial statements.
9.Generally Accepted Accounting Principles require a single method be used to develop fair value measurements for financial reporting purposes.
10. Auditors are primarily responsible for the accuracy of all “fair value measurements” reflected in a company’s financial statements.
11. An auditor’s substantive procedures may include considering the effects of subsequent events to corroborate an entity’s fair value measurements.
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