Which of These Statements Concerning Audit Reporting on Consolidated Accounts

question 15

Multiple Choice

Which of these statements concerning audit reporting on consolidated accounts is the least accurate?

• A) The opinion expressed on the consolidated accounts is the sole responsibility of the principal auditor.
• B) It may be necessary for more than one audit firm to participate in the examination.
• C) The auditor of the parent entity has very limited rights to access the accounting records and registers of the controlled entity
• D) If the auditor concludes that reliance cannot be placed on the work of another auditor, alternative procedures should be attempted before qualifying the opinion.

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Definitions:

Produced

The completed output of goods or services as a result of manufacturing or production processes.

Materials Price Variance

The difference between the actual cost of materials used in production and the expected (or standard) cost of those materials.

Direct Materials Quantity Variance

The variance between the real amount of materials consumed in production and the anticipated standard amount, multiplied by the cost per unit according to standards.

Direct Materials

Raw materials that can be directly attributed to the production of specific goods or services in a manufacturing process.