The Auditor Has Determined That There Is a Preponderance of Persuasive

question 29

Multiple Choice

The auditor has determined that there is a preponderance of persuasive evidence for each financial statement assertion that is material, and therefore a reasonable basis for their opinion. Which of the following would not be a possible opinion that the auditor could issue?

• A) an unqualified opinion.
• B) an 'except for' opinion.
• C) an adverse opinion.
• D) an inability to form an opinion.

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Definitions:

Market Method

A valuation method used to determine the fair value of assets and liabilities, based on their selling prices in active markets.

LIFO

Last-In, First-Out, an inventory valuation method where the most recently acquired items are recorded as sold first.

Retail Inventory Method

An accounting method used to estimate inventory cost for retail businesses by applying a constant gross margin percentage.

Gross Profit Ratio

A financial metric that measures a company's gross profit as a percentage of its revenues, indicating efficiency in using labor and supplies.