A Solicitor Limits a Response Concerning a Litigation Claim Because

question 32

Multiple Choice

A solicitor limits a response concerning a litigation claim because the solicitor is unable to determine the likelihood of an unfavourable outcome. Which type of opinion should the auditor express if the litigation is adequately disclosed
And the range of potential loss is material in relation to the client's financial report considered as a whole?

• A) Qualified.
• B) Unmodified with an Other Matter paragraph.
• C) Unmodified with an Emphasis of Matter paragraph.
• D) Unmodified.

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Definitions:

Treasury Stock

Shares that were issued and subsequently reacquired by the company, held in the company's treasury, and are not considered when calculating earnings per share or dividends.

Bonds Payable

A form of long-term debt issued by corporations or governments that promises to pay the bondholder a specified sum of money at future dates.

Consolidated Income Statement

A financial statement that aggregates the income and expenses of a parent company and its subsidiaries, presenting a unified financial performance.

Interest Expense

The cost incurred by an entity for borrowed funds, typically recognized on the income statement.