KMAKY Is an Accounting Firm and Has Been Hired to Audit

question 75

Multiple Choice

KMAKY is an accounting firm and has been hired to audit the books for Bike Spinners,Inc.While performing the audit,they find that although the company's financial statement fairly represents the company's position,the accounting methods the client used to arrive at the figures were not generally accepted in the accounting industry.KMAKY should provide the following opinion:

• A) a qualified opinion.
• B) an unqualified opinion.
• C) an adverse opinion.
• D) a qualified opinion, noting the problematic accounting methods.
• E) an unqualified opinion, noting the problematic accounting methods.

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Definitions:

Critical Value Approach

A method used in hypothesis testing where the value of the test statistic is compared to a critical value to decide whether to reject the null hypothesis.

Hypothesized Population

The theoretical or assumed characteristics of a population from which a sample is drawn for the purpose of hypothesis testing.

Standard Error

A statistical measure that describes the accuracy with which a sample distribution represents a population by quantifying the dispersion of sample means around the population mean.

Critical Value Approach

A method of statistical testing which involves comparing the calculated value of a test statistic to a critical value to decide whether or not to reject the null hypothesis.