In Which of the Following Circumstances Would an Auditor of Financial

question 2

Multiple Choice

In which of the following circumstances would an auditor of financial statements be most likely to express an adverse opinion?

• A)The statements are not in conformity with FASB requirements regarding goodwill impairment.
• B)Information comes to the auditor's attention that raises substantial doubt about the entity's ability to continue in existence.
• C)The chief executive officer refuses the auditor access to minutes of board of directors' meetings.
• D)Tests of controls show that the entity's internal control is so poor that it cannot be relied upon.

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Definitions:

Big Business

Large-scale or major corporations and enterprises that have significant influence on the economy, often with considerable power and resources.

Debt

A sum of money that is owed or due.

Thrift

The practice of saving money and spending it wisely, often associated with frugal living.

Reconstruction Finance Corporation

Federal program established in 1932 under President Herbert Hoover to loan money to banks and other institutions to help them avert bankruptcy.