The Audit Firm Issues an Audit Report for Its Client

question 149

Multiple Choice

The audit firm issues an audit report for its client. The auditors have no obligation to make further inquiries with respect to the client's audited financial statements unless

• A) a development occurs that may affect the company's long-term viability as a company.
• B) final resolution was made on disclosed contingency for which no liability needed to be accrued.
• C) new information comes to the auditor's attention concerning an event that occurred prior to the date of the audit report that, if known, would have impacted the audit opinion.
• D) a lawsuit, in which the risk of loss was considered remote, was resolved in the company's favor.

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Definitions:

Historical

Pertaining to past events or situations, often emphasizing the importance of context and development over time.

Ideal Type

A conceptual tool used by sociologists, particularly in the work of Max Weber, to describe and understand the essential characteristics of a social phenomenon.

Ideal Type

In sociology, a conceptual model that serves as a standard of comparison for empirical observations, developed by Max Weber.

General Sociological

Pertaining to the broad field of sociology, focusing on social behaviors, social structures, and patterns of relationships within society as a whole.