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:

Zone

A zone is a specific area or region designated for a particular purpose or characterized by a particular feature.

Proximal Development

A concept in psychology referring to the zone of development where a learner can perform a task under adult guidance or with peer collaboration that could not be achieved alone.

Imitate

To copy or mimic the actions, behavior, or physical appearance of someone or something else, often as a method of learning or entertainment.

Body Mass Index

A measure used to assess a person's body weight relative to their height, indicating if they are underweight, normal weight, overweight, or obese.