When Component Auditors Are Involved in the Audit of Group

question 121

Multiple Choice

When component auditors are involved in the audit of group financial statements, the group auditors are required to

• A)consider the independence and professional reputation of the component auditors in deciding how to utilize their work.
• B)identify the extent of component auditors' involvement if they choose not to rely on the component auditors' work.
• C)identify the component auditors by name in their report to appropriate limit their liability for the component auditors' work.
• D)disclaim an opinion on the portion of the financial statements examined by the component auditors.

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Definitions:

Cost

The amount of money or resources expended to purchase or manufacture a product or service.

Value

The importance, worth, or usefulness of something, often considered in terms of its benefit to the customer or user.

Accounting Software

A computer application used to manage and record financial transactions, aiding in the preparation of financial statements and reports.

Objection

A concern or question raised by a potential buyer that can hinder the sales process.