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Subsequent to the Close of Spacely Sprockets Fiscal Year Ending

question 88

Multiple Choice

Subsequent to the close of Spacely Sprockets fiscal year ending October 31,2016,a major debtor has declared bankruptcy due to a series of events.The receivable is significantly material in relation to the financial statements,and recovery is doubtful.The debtor had confirmed the full amount due to Spacely Sprocket at the balance sheet date.Because the account was confirmed at the balance sheet date,Spacely refuses to disclose any information in relation to this subsequent event.The CPA believes that all other accounts were stated fairly at the balance sheet date.In addition,Spacely changed their method of inventory valuation from FIFO to LIFO.This change was disclosed in Note X to the financial statements.Accordingly,what type of opinion should be expressed?

Definitions:

Academically

Pertaining to schools, colleges, universities, or education and learning in general, often used to describe something related to the academic community or educational achievements.

Tend-and-Befriend

A behavior response theory which suggests that during stress, individuals, particularly women, will seek to form alliances with others as a means to cope.

Fight-or-Flight

A physiological reaction that occurs in response to a perceived harmful event, attack, or threat to survival.

Imminent Threat

A danger that is forthcoming and appears likely to occur in the very near future.