Which Statement Is Correct as to Financial Statement Audit Reports

question 109

Multiple Choice

Which statement is correct as to financial statement audit reports for public versus private companies?

• A)There is a standard report for the audit of public company financial statements and a standard report for the audit of private company financial statements.
• B)There is a standard report for the audit of public company financial statements but none for auditing private company financial statements.
• C)There is a standard report for the audit of private company financial statements but none for auditing public company financial statements.
• D)There is no distinction between standard reports for the audit of financial statements, regardless of whether the company is private or public.

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Definitions:

Statute of Frauds

A legal principle requiring certain contracts to be in writing and signed by the party to be charged to be enforceable.

Oral Contract

An agreement between parties that is spoken, not written, but is still legally binding.

Customized Goods

Products that are specifically made according to the specifications or requirements of a customer.

Partial-Performance Exception

A legal principle that allows for the enforcement of an oral contract when one party has taken significant action based on the agreement, despite the lack of a written contract.