An Auditor Was Unable to Obtain Audited Financial Statements or Other

question 232

Multiple Choice

An auditor was unable to obtain audited financial statements or other evidence supporting an entity's investment in a foreign subsidiary. Between which of the following opinions should the entity's auditor choose?

• A) Adverse and unqualified with an explanatory paragraph added.
• B) Disclaimer and unqualified with an explanatory paragraph added.
• C) Qualified and adverse.
• D) Qualified and disclaimer.

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Definitions:

Fair Value

An estimation of an asset's worth based on current market conditions or the amount for which an asset could be exchanged.

Distribution Agreement

A legal contract between parties governing the terms under which goods or services will be distributed from a supplier to a distributor.

Licensing

The process by which an individual or organization obtains permission to carry out a particular activity or use a particular product.

Agency Relationship

A legal arrangement in which one party, the agent, acts on behalf of another party, the principal, in transactions with a third party.