Three of the Following Conditions Would, by Themselves, Require the Auditor

question 48

Multiple Choice

Three of the following conditions would, by themselves, require the auditor to issue a report other than an unqualified report. Which condition would permit a standard unqualified report?

• A) The financial statements show a significant net loss for each of the last three years, including the current fiscal period.
• B) The financial statements have not been prepared in accordance with an acceptable financial reporting framework and are misleading.
• C) The auditor is not independent during the fiscal period under audit.
• D) The scope of the auditor's examination has been restricted, although the cause of the restriction was not the client's fault.

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Definitions:

Premises

Statements or propositions upon which an argument is based or from which conclusions are drawn.

Excludes

A term used to indicate that certain items or categories are not part of a group or set.

Alternatives

Other options or choices available in a given situation.

Scenario

A written outline of a plot and individual scenes, often used in the context of planning.