Whenever Special Reports, Filed on a Printed Form Designed by Authorities

question 11

Multiple Choice

Whenever special reports, filed on a printed form designed by authorities, call upon the independent auditor to make an assertion that the auditor believes is not justified, the auditor should:

• A)reword the form or attach a separate report.
• B)submit a standard auditor's report with explanations in a separate paragraph of the report.
• C)withdraw from the engagement.
• D)submit the form with questionable items clearly omitted.

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Definitions:

Earnings Multiple

A valuation metric that indicates the ratio of a company's market price per share to its earnings per share (EPS), commonly used to gauge stock valuation.

Earnings Multiple

A valuation metric that shows how much investors are willing to pay for one dollar of earnings; commonly used in the P/E (price-to-earnings) ratio.

Extraordinary Item

Transactions and events that are both unusual and infrequent in nature, distinctly separate from the ordinary activities of the company, often excluded from the assessment of its ongoing operational performance.

Transitory Earnings

Earnings that are considered to be non-recurring or not indicative of the company's future earning potential.