An Auditor Includes a Separate Paragraph in an Otherwise Unmodified

question 3

Multiple Choice

An auditor includes a separate paragraph in an otherwise unmodified report to emphasize that the entity being reported on had significant transactions with related parties. The inclusion of this separate paragraph:

• A)is considered an "except for" qualification of the opinion.
• B)violates generally accepted auditing standards if this information is already disclosed in footnotes to the financial statements.
• C)necessitates a revision of the opinion paragraph to include the phrase "with the foregoing explanation."
• D)is appropriate and would not negate the unqualified opinion.

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Definitions:

Cost of Goods Sold

The expenses directly linked to the manufacturing of goods a company sells.

Specific Invoice

An itemized bill showing quantities, descriptions, prices, and terms of products and services provided by a seller to a buyer.

Ending Inventory

The total value of all unsold goods remaining at the end of an accounting period.

Recent Invoices

The latest billing statements or documents issued by a seller to a buyer, relating to a sale transaction and indicating the products, quantities, and agreed prices.