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Management Believes, and the Auditor Is Satisfied, That a Material

question 6

Multiple Choice

Management believes, and the auditor is satisfied, that a material loss probably will occur when pending litigation is resolved. Management is unable to make a reasonable estimate of the amount or range of the potential loss, but fully discloses the situation in the notes to the financial statements. If the auditor wishes to call attention to the matter and management does not make an accrual in the financial statements, the auditor should issue a(n) :


Definitions:

Adolescence

A transitional period between childhood and adulthood, usually seen as being bounded by puberty at the lower end and by the assumption of adult responsibilities at the upper end.

Growth Spurt

A rapid increase in height and weight, typically occurring during puberty.

Physical Changes

Alterations in the physical state or appearance of a substance or organism, without changing its chemical composition.

Stocky

Describes a person's build as being broad, solid, and often short, suggesting a sturdy physical form.

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