In Which of the Following Situations Would an Auditor Ordinarily

question 720

Multiple Choice

In which of the following situations would an auditor ordinarily choose between expressing a qualified opinion or an adverse opinion?

• A) The auditor did not observe the entity's physical inventory and is unable to become satisfied about its balance by other auditing procedures.
• B) Conditions that cause the auditor to have substantial doubt about the entity's ability to continue as a going concern are inadequately disclosed.
• C) There has been a change in accounting principles that has a material effect on the comparability of the entity's financial statements.
• D) The auditor is unable to apply necessary procedures concerning an investor's share of an investee's earnings recognized on the equity method.

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Definitions:

Duty To Honor

The obligation to accept and fulfill legal or financial commitments or contracts.

Drawee Bank

The bank upon which a check is drawn, meaning the bank that is ordered to pay the check's amount.

Aggravated Identity Theft

A crime involving the deliberate use of someone else's identity to carry out illegal activities, especially when it involves fraud or theft and results in severe consequences.

Signature Card

A document signed by an account holder at a financial institution, providing a specimen signature for verification purposes.