In Which One of the Following Instances Would an Auditor

question 46

Multiple Choice

In which one of the following instances would an auditor most likely issue a disclaimer of opinion?

• A) Management will not sign a management representation letter.
• B) Management declines to provide a statement of cash flow.
• C) The auditor is independent of the client.
• D) The auditor is unable to confirm receivables but performs alternative procedures.

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Definitions:

Real Asset

Physical or tangible assets such as real estate, commodities, and natural resources that have intrinsic value.

Bonds

Fixed-income investments where an investor loans money to an entity (corporate or governmental) which borrows the funds for a defined period of time at a fixed interest rate.

Stocks

Shares of ownership in a company, representing a claim on the company's assets and profits.

Financial Assets

Assets that derive value because of a contractual claim, such as stocks, bonds, and bank deposits.