An Auditor Concludes That There Is a Material Inconsistency in the Other

question 39

Multiple Choice

An auditor concludes that there is a material inconsistency in the other information in an annual report to shareholders containing an audited financial report. If the auditor concludes that the financial report does require revision, but the
Client refuses to revise or eliminate the material inconsistency, the auditor may:

• A) consider the matter closed since the other information is not covered by the audited financial report.
• B) issue a qualified opinion after discussing the matter with the client's board of directors.
• C) revise the auditor's report to include an Emphasis of Matter paragraph describing the material inconsistency.
• D) disclaim an opinion on the financial report after explaining the material inconsistency in a separate explanatory paragraph.

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Definitions:

Perfect Information

A condition in decision theory and economics where all participants have full and identical knowledge about the actions others can take.

Power Company

A corporation that generates, transmits, and distributes electricity to consumers and businesses.

Expected Payoff

In decision theory and economics, the weighted average of all possible outcomes of a decision, where each outcome is weighted by its respective probability of occurrence.

Perfect Information

A situation where all participants have full and equal knowledge about the game structure, strategies, and outcomes in decision-making scenarios.