When the Entity Fails to Include Information That Is Necessary

question 50

Multiple Choice

When the entity fails to include information that is necessary for the fair presentation of financial statements in the body of the statements or in the related footnotes, it is the responsibility of the auditor to present the nature and impact of the faulty accounting or misstatement in the auditor's report and express a(n) :

• A)qualified opinion or a disclaimer of opinion.
• B)qualified opinion or an adverse opinion.
• C)adverse opinion or a disclaimer of opinion.
• D)qualified opinion or an unqualified opinion.

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Definitions:

Freight Costs

Expenses associated with transporting goods from one place to another, which can be paid by the shipper or the receiver.

Net 45

A payment term indicating that the full payment is due 45 days from the invoice date.

Credit Terms

The conditions under which a seller extends credit to a buyer, detailing the repayment time frame, interest rate, and penalties for late payment.

Cost of Goods Sold

The direct expenses related to the manufacture of the goods a company sells, encompassing both costs of materials and labor.