Which of the Following Events Occurring After the Issuance of an Entity's

question 21

Multiple Choice

Which of the following events occurring after the issuance of an entity's financial statements and the auditor's report most likely would cause the auditor to make further inquiries about the previously issued financial statements?

• A)An uninsured natural disaster occurs that may affect the entity's ability to continue as a going concern.
• B)A contingency is resolved that had been disclosed in the audited financial statements.
• C)New information is discovered concerning undisclosed lease transactions in the audited period.
• D)A subsidiary that accounts for 25 percent of the entity's consolidated net income is sold.

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Definitions:

Social Dominance Orientation

A personality trait which predicts social and political attitudes, emphasizing a preference for hierarchy in the social structure and domination over lower-status groups.

Need for Structured Knowledge

The desire or preference for organized and coherent information in order to understand complex phenomena or concepts better.

Right-Wing Authoritarianism

A personality and ideological framework characterized by submission to authority, aggression towards out-group members, and adherence to societal conventions.

Need for Structured Knowledge

A cognitive requirement where individuals seek organized and coherent information to understand complex phenomena or situations.