More Than One Modification Should Be Included in the Audit

question 108

Multiple Choice

More than one modification should be included in the audit report when

• A) the auditor is not independent and the auditor knows that the company has not followed generally accepted accounting principles.
• B) there is substantial doubt about the going concern of the company and information about the causes of the uncertainties is not adequately disclosed in the footnotes.
• C) there is a scope limitation and there is substantial doubt about the company's ability to continue as a going concern.
• D) all of the above.

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Definitions:

Economic Relationship

Refers to the interactions between different economic variables or entities, such as the connection between supply and demand or investment and economic growth.

Hedge Ratio

A ratio used to measure the proportion of a position that is hedged, indicating the effectiveness of a hedge against fluctuations.

Fair Value Hedge

A hedge of the exposure to changes in the fair value of a recognized asset or liability or an unrecognized firm commitment, or some component thereof, that is attributable to a particular risk and could affect profit or loss.

Forward Contract

A customized contract between two parties to buy or sell an asset at a specified future date for a price that is agreed upon today.