When Issuing an Unqualified Opinion, the Auditor Who Evaluates the Audit

question 20

Multiple Choice

When issuing an unqualified opinion, the auditor who evaluates the audit findings should be satisfied that the:

• A) Amount of known misstatement is documented in the management representation letter.
• B) Estimate of the total misstatement is less than a material amount.
• C) Amount of known misstatement is acknowledged and recorded by the client.
• D) Estimate of the total likely misstatement includes the adjusting entries already recorded by the client.

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Definitions:

Issuer

An entity that issues and is responsible for the financial instruments like stocks or bonds.

Tombstone Ad

An advertisement, typically in the print media, announcing a public offering of securities, with minimal detail.

Preliminary Prospectus

An initial document provided by a securities issuer that describes the company and the investment being offered, prior to finalization.

Free-Writing Prospectus

A written communication used during a securities offering to provide potential investors with additional information not contained within the formal prospectus.