During the Year Under Audit, Forrest Corporation Experienced Significant Losses

question 114

Multiple Choice

During the year under audit, Forrest Corporation experienced significant losses due to a pervasive fraud scheme. Because of the lack of documentary evidence and inability to perform appropriate auditing procedures, the auditors were unable to determine the total amount of the loss. What type of report should the auditors issue?

• A)Qualified or adverse opinion.
• B)Disclaimer or adverse opinion.
• C)Disclaimer of opinion or qualified opinion.
• D)Unmodified opinion with an other-matter paragraph.

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Definitions:

Express Warranty

A clearly stated guarantee provided by a seller regarding the condition or quality of a product.

Implied Warranty

An unwritten, unstated guarantee that a product will meet basic standards of quality and reliability.

Express Warranty

A seller's explicit promise or guarantee, assuring the quality or performance of a product, often included in the written contract.

UCC

The Uniform Commercial Code, a comprehensive set of laws governing all commercial transactions in the United States, intended to harmonize the law among the states.