An Auditor Concludes That There Is a Material Inconsistency in the Other

question 13

Multiple Choice

An auditor concludes that there is a material inconsistency in the other information in an annual report to shareholders containing audited financial statements. If the auditor concludes that the financial statements do not require revision, but the entity refuses to revise or eliminate the material inconsistency, the auditor may:

• A)issue an "except for" qualified opinion after discussing the matter with the entity's board of directors.
• B)consider the matter closed since the other information is not in the audited financial statements.
• C)disclaim an opinion on the financial statements after explaining the material inconsistency in a separate explanatory/emphasis-of-matter paragraph.
• D)revise the auditor's report to include a separate explanatory (or other matter)paragraph describing the material inconsistency.

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Definitions:

Job Security

The probability that an individual will retain their employment position without the risk of becoming unemployed.

Organizational Culture

The system of shared beliefs, values, customs, behaviors, and artifacts that the members of an organization use to cope with their world and with one another.

Employee Preferences

The various desires or priorities of employees, such as work conditions, benefits, and job roles.

Clan Cultures

Describes organizational cultures emphasizing family-like values, where loyalty, tradition, and personal relationships are paramount.