Auditors Who Are Reporting on Financial Statements That Contain a Material

question 128

Multiple Choice

Auditors who are reporting on financial statements that contain a material departure from generally accepted accounting principles should

• A)express a qualified or adverse opinion.
• B)not modify the Opinion Section of the report as long as the departure is adequately disclosed in a footnote.
• C)disclaim an opinion on the financial statements.
• D)express a qualified opinion or disclaimer of opinion.

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Definitions:

Shareholders Meeting

A formal gathering of the shareholders of a company to discuss and vote on company business.

Special Meeting

A meeting called for a specific purpose, outside of the regularly scheduled sessions.

Cumulative Voting

A system of voting for directors of a corporation in which shareholders can concentrate their votes on one candidate, rather than having to distribute them equally among candidates.

Majority Shareholder

An individual or entity that owns more than half of a company's outstanding shares, giving them controlling interest.