Which of the Following Circumstances Requires an Explanatory Paragraph in the Independent

question 2

Multiple Choice

Which of the following circumstances requires an explanatory paragraph in the independent auditors' report?

• A)Basing the opinion in part on the work of another auditor.
• B)Uncertainties about the outcome of a significant event that would have affected the presentation of the financial statements if the outcome could have been estimated.
• C)Substantial doubt about the entity's ability to continue as a going concern.
• D)A material change from a prior accounting period in the application of an accounting principle.
• E)An explanatory paragraph in the independent auditors' report is required in each of these circumstances.

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Definitions:

Facets

Smooth, flat surfaces that form joints between the vertebrae in the spine, allowing for flexibility and movement.

Transverse Foramina

Small openings in the transverse processes of the cervical vertebrae allowing passage of the vertebral artery.

Transverse Processes

Lateral projections from the vertebrae to which muscles and ligaments attach, and serve as points of articulation for ribs in thoracic vertebrae.

Vertebral Arch

The structure in a vertebra that encloses the spinal cord, formed by pedicles and laminae.