If Management Revises the Financial Statements Due to Subsequently Discovered

question 15

Multiple Choice

If management revises the financial statements due to subsequently discovered facts, auditors should_______.

• A)perform no further audit procedures on the changes made by management
• B)perform audit procedures on the changes made by management
• C)always issue a qualified opinion with respect to the changes
• D)issue a scope limitation, even if they are able to audit the changes

---

Definitions:

Securities

Financial instruments representing an ownership position, debt, or rights to ownership, traded in financial markets, such as stocks, bonds, and options.

Security Interests

A legal claim or lien on collateral that secures the performance of an obligation, typically seen in financing transactions.

Enforceable Oral Contracts

Verbal agreements that are recognized by law as binding, provided they meet certain criteria and are not for purposes requiring written contracts under the statute of frauds.

Substitute

An alternative or replacement for something else, often found or used when the original is unavailable or unsuitable.