In the Audit of Consolidated Financial Statements Under U

question 109

Multiple Choice

In the audit of consolidated financial statements under U.S. auditing standards when more than one CPA firm is involved and the principal audit firm chooses to mention the other firm(s) , the wording of which paragraph(s) is modified?

• A) Introductory Paragraph: No; Scope Paragraph: No; Opinion Paragraph: Yes.
• B) Introductory Paragraph: No; Scope Paragraph: Yes; Opinion Paragraph: Yes.
• C) Introductory Paragraph: Yes; Scope Paragraph: Yes; Opinion Paragraph: Yes.
• D) Introductory Paragraph: Yes; Scope Paragraph: Yes; Opinion Paragraph: No.

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Definitions:

Straight-Line Method

A method of calculating depreciation of an asset, which divides the difference between its cost and salvage value by the useful life of the asset.

Resale Value

The estimated value or price at which an asset or item can be sold again in the future.

Equipment

Tangible property used in operations, such as machinery, computer hardware, and vehicles.

Double-Declining-Balance

A method of accelerated depreciation where the book value of an asset is reduced at double the rate of its straight-line depreciation.