ProForce Inc

question 35

Multiple Choice

ProForce Inc. is facing a large lawsuit from its employees. The contingency is significant and may lead to a going concern issue if ProForce is found guilty. ProForce took the adequate measures, as prescribed by IFRS (International Financial Reporting Standards) , to account, disclose, and present the contingency in the financial statements. The auditor should

• A) add an emphasis of matter paragraph after the opinion paragraph.
• B) issue a standard unqualified report.
• C) issue a qualified report.
• D) deny an audit opinion.

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Definitions:

Existing Stockholders

Individuals or entities that currently own shares in a company.

Subscription Price

The cost at which existing shareholders can buy additional shares of a company, often at a discount.

Rights Offering

A financial mechanism by which companies offer existing shareholders the right to buy additional shares directly from the company at a predetermined price, usually at a discount, before the shares are offered to the public.

Value Of A Right

In finance, the value associated with a right, such as a stock right, which is the value to buy additional shares at a discounted price.