The Auditor Has Decided That the Financial Statements Are Affected

question 11

Multiple Choice

The auditor has decided that the financial statements are affected by an uncertainty that is not susceptible to reasonable estimation at the balance sheet date. If this uncertainty is adequately disclosed in the financial statements, the auditor's report should contain a(n) :

• A) standard unqualified opinion.
• B) adverse opinion.
• C) disclaimer of opinion.
• D) unqualified opinion with an 'emphasis of matter' paragraph.

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Definitions:

Gross Profit

The difference between revenue from sales and the cost of goods sold, before accounting for selling, general, and administrative expenses.

Cost of Goods Sold

The specific costs related to the production of goods that a company markets.

Net Realizable Value

An estimated selling price in the ordinary course of business minus reasonably predictable costs of completion, disposal, and transportation.