When Auditors Are Engaged to Make an Assertion on a Report

question 58

Multiple Choice

When auditors are engaged to make an assertion on a report filed on a printed form designed by authorities,and they believe the assertion is not justified,the auditors should:

• A)Submit a short-form report with explanations.
• B)Reword the form or attach a separate report.
• C)Submit the form with questionable items clearly omitted.
• D)Withdraw from the engagement.

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Definitions:

Personal Use

Use of an asset for private, non-business purposes by an individual or family.

Flow-Through Entity

A business entity where income flows directly to investors or owners, avoiding corporate income tax.

Limited Liability Company

A business structure that combines the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation.

Sole Proprietorship

A sole proprietorship is a type of unincorporated business owned and operated by one individual, with no distinction between the business and the owner for legal and tax purposes.