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The Following Four Situations Require a Modification to the Standard

question 27

Essay

The following four situations require a modification to the standard unqualified audit report for public companies. Identify the modification required for each.
a. Opinion based in part on the report of another auditor.
b. Going concern.
c. Lack of comparability.
d. Emphasize a matter.


Definitions:

Law of Supply and Demand

An economic principle stating that the price of a good or service is determined by its availability (supply) and the desire for it (demand), assuming all else being equal.

DRG System

Diagnosis-related group system, a method used by healthcare providers to classify hospitalization costs and determine how much to reimburse for care based on the diagnosis.

Health Care Costs

refer to the expenses associated with the prevention, diagnosis, treatment, and management of illness and the preservation of mental and physical well-being.

Affordable Care Act

A comprehensive health care reform law enacted in 2010 in the United States to increase health insurance quality and affordability.

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