If the Previous Period's Financial Statements Are Unaudited, and Sufficient

question 1

Multiple Choice

If the previous period's financial statements are unaudited, and sufficient appropriate evidence is unavailable, then the current auditor's report will be:

• A) qualified on the basis of scope limitation.
• B) unqualified on the basis that the comparatives are unaudited and no opinion is expressed on them.
• C) qualified on the basis that the comparatives are unaudited and an opinion is expressed on them.
• D) qualified on the basis that the comparatives are unaudited and no opinion is expressed on them.

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Definitions:

Inductive Reasoning

A method of reasoning in which specific observations or instances are used to make broader generalizations or conclusions.

Concrete Reasoning

The ability to understand and reason about tangible, physical objects and events, rather than abstract concepts.

Analytic Thought

The process of using logic and critical reasoning to break down complex problems or ideas.

Hypothetical-Deductive Thinking

A form of reasoning which involves developing hypotheses based on what might logically occur, followed by deducing logical, testable inferences, primarily seen in scientific and mathematical problem-solving, characteristic of formal operational thought in adolescence.