When Single-Year Financial Statements Are Presented, an Auditor Ordinarily Would

question 852

Multiple Choice

When single-year financial statements are presented, an auditor ordinarily would express an unqualified opinion in an unmodified report if the:

• A) Auditor is unable to obtain audited financial statements supporting the entity's investment in a foreign affiliate.
• B) Entity declines to present a statement of cash flows with its balance sheet and related statements of income and retained earnings.
• C) Auditor wishes to emphasize an accounting matter affecting the comparability of the financial statements with those of the prior year.
• D) Prior year's financial statements were audited by another CPA whose report, which expressed an unqualified opinion, is not presented.

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Definitions:

Unit Sales

The quantity of products sold by a company, not taking into account the revenue generated or discounts provided.

Break-even

The break-even point, where total costs are exactly matched by total revenues, leading to neither profits nor losses.

Monthly Dollar Sales

The total sales revenue generated within a month, expressed in dollar terms.

Budgeted Sales

Forecasted sales revenue for a future period, based on market analysis, historical data, and sales targets.