When There Is a Justified Departure from GAAP Which Is

question 36

Multiple Choice

When there is a justified departure from GAAP which is considered material, the auditor should issue a(n) :

• A)standard unqualified audit report.
• B)disclaimer of opinion.
• C)unqualified audit report with an explanatory paragraph.
• D)adverse opinion.

---

Definitions:

Tax Rate

The determined percentage of earnings that an individual or a corporation must contribute as tax.

Debt-equity Ratio

This ratio compares a company's total liabilities to its shareholder equity, indicating the relative proportion of shareholder equity and debt used to finance a company's assets.

Pre-tax Cost

This is the cost of an investment or financial activity before the application of taxes.

Cost of Equity

The return that investors expect for investing in a company's equity, often estimated using models like the Capital Asset Pricing Model (CAPM).