William Gregory, CPA, Is the Principal Auditor for a Multi-National

question 24

Multiple Choice

William Gregory, CPA, is the principal auditor for a multi-national corporation.Another CPA has examined and reported on the financial statements of a significant subsidiary of the corporation.Gregory is satisfied with the independence and professional reputation of the other auditor, as well as the quality of the other auditor's examination.With respect to his report on the consolidated financial statements, taken as a whole, Gregory:

• A)must not refer to the examination of the other auditor.
• B)must refer to the examination of the other auditor.
• C)may refer to the examination of the other auditor.
• D)must refer to the examination of the other auditors along with the percentage off consolidated assets and revenue that they audited.

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Definitions:

Joint Costs

Costs incurred during the production of multiple products up until the point where these products become separately identifiable, making allocation necessary for cost accounting purposes.

Market Value

The current price at which an asset or service can be bought or sold in a marketplace.

Preon

Fundamental particles proposed as building blocks of quarks and leptons, not yet observed experimentally.

Value Basis

The underlying method used to determine the value of assets or liabilities, such as historical cost or market value.