Comparative Financial Statements Include the Financial Statements of the Prior

question 631

Multiple Choice

Comparative financial statements include the financial statements of the prior year that were audited by a predecessor auditor whose report is not presented. If the predecessor's report was qualified, the successor should:

• A) Indicate the substantive reasons for the qualification in the predecessor auditor's opinion.
• B) Request the client to reissue the predecessor's report on the prior year's statements.
• C) Issue an updated comparative audit report indicating the division of responsibility.
• D) Express an opinion only on the current year's statements and make no reference to the prior year's statements.

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Definitions:

Conversion

The unauthorized act of possessing or using someone else's property as if it were one's own, which interferes with the owner's rights.

Dominion

Supreme authority or control over a domain, or the ownership and absolute right to use, enjoy, and dispose of property.

Real Property

Land and anything permanently attached to it, including buildings and other structures, considered a form of real estate.

Conversion

is a tort that involves the unauthorized taking or use of someone else's personal property, depriving them of its possession or use.