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:

Nonprofit Organizations

Organizations that operate for collective, public, or social benefit, rather than to accumulate profit for owners or investors.

Government Financial Support

Monetary assistance provided by the government to individuals, organizations, or businesses, often aimed at economic stabilization or promoting specific policies.

Grant Application

A formal request for financial support from a private or public funding agency.

Charitable Subsector

A division within the nonprofit sector that focuses specifically on organizations whose primary purpose is charitable work.