In Which Paragraph of the Standard Audit Report Does the Auditor

question 54

Multiple Choice

In which paragraph of the standard audit report does the auditor communicate to the user that certain combining fund information in the financial statements is not part of the basic financial statements,but that such information has been subjected to auditing procedures and,in his or her opinion,is fairly presented in all material respects in relation to the basic financial statements?

• A) Explanatory paragraph.
• B) Scope paragraph.
• C) Opening paragraph.
• D) Opinion paragraph.

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Definitions:

FIFO

An inventory valuation method that assumes the first items placed in inventory are the first sold, standing for 'First In, First Out'.

GAAP

Generally Accepted Accounting Principles, a set of accounting standards and procedures used in the United States to govern financial reporting.

Current Cost

The cost that would be incurred to replace an asset or to purchase an equivalent asset at the current time.

Management Discretion

The degree of flexibility and judgement allowed to managers in making decisions and choices impacting the company's operations and performance.