Which of the Following Situations Will Not Result in Modification

question 33

Multiple Choice

Which of the following situations will not result in modification of the auditor's report because of a scope limitation?

• A)Restriction imposed by the client.
• B)Reliance placed on the report of another auditor.
• C)Inability to obtain sufficient competent evidential matter.
• D)Inadequacy in the accounting records.

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Definitions:

Working Capital

The difference between a company's current assets and current liabilities, indicating the liquidity available to run its day-to-day operations.

Current Liabilities

Obligations that are due within one year or within the normal operating cycle of the business, whichever is longer.

Days' Sales In Inventory

Days' Sales in Inventory is a financial ratio that indicates the average time in days that a company takes to turn its inventory into sales.

Sales On Account

Transactions where goods or services are sold and payment is to be made at a later date, often recorded as accounts receivable.