In Which One of the Following Instances Would an Auditor

question 90

Multiple Choice

In which one of the following instances would an auditor most likely issue an adverse opinion?

• A) Management declines to present earnings per share in the income statement.
• B) There is substantial doubt about the entity's ability to continue as a going concern.
• C) There is a material dollar misstatement that overshadows the overall financial statements.
• D) The client does not allow the auditor to send confirmations to its three largest customers.

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Definitions:

Sub-subsidiaries

Entities that are controlled by a subsidiary of a parent company, thus being one level below subsidiaries in the ownership hierarchy.

Sequence of Acquisition Dates

Refers to the chronological order in which significant ownership interests in other entities are obtained, impacting the consolidation process and valuation of investments.

Indirect NCI

Represents the portion of equity in a subsidiary not attributable directly to the parent company, often arising in complex group structures.

Tiered Group

A structure of multiple groups or entities arranged in a hierarchy, where control or ownership is exercised through several layers.