Zag Co Issues Financial Statements That Present Financial Position and Results

question 84

Multiple Choice

Zag Co. issues financial statements that present financial position and results of operations, but Zag omits the related statement of cash flows. Zag would like to engage Brown, CPA, to audit its financial statements without the statement of cash flows although Brown's access to all of the information underlying the basic financial statements would not be limited. Under the circumstances, Brown most likely would

• A)add an other-matter paragraph to the standard (unmodified)report that justifies the omission.
• B)refuse to accept the engagement as proposed because of the client-imposed scope limitation.
• C)explain to Zag that the omission requires a qualification of the auditors' opinion.
• D)prepare the statement of cash flows as an accommodation to Zag and express an unmodified opinion.

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Definitions:

Reinforcement Contingency

Reinforcement contingency is a term in behavioral psychology that refers to the relationship between a behavior and its consequence, emphasizing that a behavior must be followed by a reinforcement for the behavior to be increased.

Internal

Pertaining to or situated within something; often refers to phenomena or processes occurring within an organism or object.

External

Originating from outside, not confined within an entity or individual.

Achievement Motivation

The drive to excel, achieve in relation to a set of standards, or strive to succeed.