As a Result of Management's Refusal to Permit the Auditor

question 3

Multiple Choice

As a result of management's refusal to permit the auditor to physically examine inventory, the auditor has not accumulated sufficient evidence to conclude whether financial statements are stated in accordance with ASPE (Accounting Standards for Private Enterprises) . The auditor must depart from the unqualified audit report because

• A) the financial statements have not been prepared in accordance with GAAP.
• B) the scope of the audit has been restricted by circumstances beyond either the client's or auditor's control.
• C) the auditor has lost independence.
• D) the scope of the audit has been restricted by the client.

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Definitions:

Statute of Frauds

a legal principle that requires certain types of contracts to be executed in writing and signed by the party to be charged, for the purpose of preventing fraud.

Interests in Land

Legal rights or claims to the use, ownership, or possession of real estate or property.

Statute of Frauds

A legal doctrine requiring certain contracts to be in writing and signed by the party to be charged, to prevent fraud and perjuries.

Written Contract

is a legally binding agreement that has been expressed in textual form, detailing the terms and conditions between parties.