18. When allocating materiality, most practitioners choose to allocate to (A) the income statement accounts because they are more important. (B) the balance sheet accounts because most audits focus on the balance sheet. (C) both balance sheet and income statement accounts because there could be errors on either. (D) all of the financial statements because it is required by GAAS.

25. The audit firm issues an audit report for its client. The auditors have no obligation to make further inquiries with respect to the client's audited financial statements unless? (A) a development occurs that may affect the company's long-term viability. (B) final resolution was made on disclosed contingency for which no liability needed to be accrued. (C) new information comes to the auditor's attention concerning an event that occurred prior to the date of the audit report that, if known, would have impacted the audit opinion. (D) a lawsuit, in which the risk of loss was considered remote, was resolved in the company's favor.

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