An Auditor Includes a Separate Paragraph in an Otherwise Unmodified

question 1046

Multiple Choice

An auditor includes a separate paragraph in an otherwise unmodified report to emphasize that the entity being reported on had significant transactions with related parties. The inclusion of this separate paragraph:

• A) Is considered an "except for" qualification of the opinion.
• B) Violates generally accepted auditing standards if this information is already disclosed in footnotes to the financial statements.
• C) Necessitates a revision of the opinion paragraph to include the phrase "with the foregoing Explanation"
• D) Is appropriate and would not negate the unqualified opinion.

---

Definitions:

Price Rises

An increase in the cost of goods or services, which can affect consumer buying power and inflation rates.

Elasticity of Supply

A measure of how much the quantity supplied of a good changes in response to a change in its price.

Demand

The quantity of a good or service that consumers are willing to buy at a given price over a specific period of time.

Equilibrium Price

The market price at which the quantity of goods supplied equals the quantity of goods demanded.