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.

---

Definitions:

After-Tax Cost

The net cost of a financial transaction after factoring in the effects of taxes.

Straight-Line Method

A method of calculating depreciation of an asset, where the asset's cost is evenly spread over its useful life, resulting in equal annual depreciation expenses.

Salvage Value

The estimated residual value of an asset at the end of its useful life, often considered for depreciation calculations.

Lease Payments

Regular payments made by a lessee to an lessor for the use of an asset over a specified period.