Restrictions Imposed by a Client Prohibit the Observation of Physical

question 969

Multiple Choice

Restrictions imposed by a client prohibit the observation of physical inventories, which account for 35% of all assets. Alternative audit procedures cannot be applied, although the auditor was able to examine satisfactory evidence for all other items in the financial statements. The auditor should issue a(an) :

• A) "Except for" qualified opinion.
• B) Disclaimer of opinion.
• C) Unqualified opinion with a separate explanatory paragraph.
• D) Unqualified opinion with an Explanation: in the scope paragraph. Unqualified opinion with an Explanation: in the scope paragraph.

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Definitions:

Comprehensive Income

All changes in stockholders’ equity during a period, except those resulting from dividends and stockholders’ investments.

Income Statement

A financial statement that shows a company's revenues, expenses, and net income or loss over a specified period.

Stockholders' Equity

The corporation's residual interest in the assets of the company after deducting liabilities.

Comprehensive Income

The total change in equity for a business that is not attributable to owners' investments or withdrawals.