In Connection with the Examination of the Consolidated Financial Statements

question 51

Multiple Choice

In connection with the examination of the consolidated financial statements of Mott Industries, Frazier, CPA, plans to refer to another CPA's examination of the financial statements of a subsidiary company. Under these circumstances, Frazier's report must disclose:

• A)the name of the other CPA and the type of report issued by the other CPA.
• B)the portion of the financial statements examined by the other CPA.
• C)the nature of Frazier's review of the other CPA's work.
• D)in a footnote the portions of the financial statements that were covered by the examinations of both auditors.

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Definitions:

Noun Clause

A dependent clause that functions as a noun within a larger sentence, often starting with words like "that," "whom," or "where."

Restrictive

Pertains to a limiting or controlling condition or rule.

Nonrestrictive

Descriptive text that provides additional information but is not essential to the meaning of the sentence.

Carbonic Acid

A weak, unstable acid (H2CO3) formed in solution when carbon dioxide dissolves in water and participates in the carbonate buffer system in blood.