In Which of the Following Circumstances Would an Auditor Most

question 840

Multiple Choice

In which of the following circumstances would an auditor most likely add an explanatory paragraph to the standard report while not affecting the auditor's unqualified opinion?

• A) The auditor is asked to report on the balance sheet, but not on the other basic financial statements.
• B) There is substantial doubt about the entity's ability to continue as a going concern.
• C) Management's estimates of the effects of future events are unreasonable.
• D) Certain transactions cannot be tested because of management's records retention policy.

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Definitions:

Domestic Output

The total value of all goods and services produced within a country’s borders.

Poverty

A state where individuals or communities lack the financial resources and essentials for a minimum standard of living, often measured by income level.

Land Reform

Policy changes aimed at creating a more efficient distribution of land ownership in developing countries. Can involve everything from government purchasing large land estates and dividing the land into smaller farms to consolidating tiny plots of land into larger, more efficient private farms.

Institutional Obstacle

Barriers established by social, legal, or political institutions that hinder economic development or the operation of markets.