The Auditors' Report on the Entity's Financial Statements Included Language

question 156

Multiple Choice

The auditors' report on the entity's financial statements included language disclosing a difference of opinion between the auditors and the entity for which the auditors believed an adjustment to the financial statements should be made. The Opinion on the Financial Statements section of the auditors' report should express a(n)

• A)unqualified opinion.
• B)qualified opinion citing a departure from generally accepted accounting principles.
• C)qualified opinion citing a scope limitation and lack of specific evidence.
• D)disclaimer of opinion.

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Definitions:

Normal Good

A type of good for which demand increases as the income of the consumer increases, indicating a direct relationship between income and demand.

Yield to Call

The return an investor would receive if a callable bond is held until the issuer exercises their option to redeem it before its maturity date.

Current Yield

The annual interest payment of a bond divided by its current market price, used to compare the return on investment of different bonds.

Coupon Bond

A debt security that pays the holder a fixed interest rate (the coupon) periodically until maturity, at which point the principal is repaid.