Which of the Following Requires an Explanatory Paragraph in the Independent

question 19

Multiple Choice

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

• A) Basing the opinion 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.
• C) Substantial doubt about the entity's viability to continue as a going concern.
• D) None of these.
• E) Basing the opinion on the work of another auditor, uncertainties about the outcome of a significant event that would have affected the presentation of the financial statements and substantial doubt about the entity's viability to continue as a going concern are correct.

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Definitions:

In Disrepair

Refers to a condition where a property or item is broken, damaged, or not functioning correctly due to neglect or wear and tear.

Landlord

The owner of a property that is rented or leased to another party, known as a tenant.

Gratuitous Bailment

An arrangement where one party (the bailor) entrusts their property to another (the bailee) without expecting any payment in return, solely for the benefit of the owner.

Legal Obligation

A duty bound by law that requires an individual or entity to act or refrain from acting in a certain way.