A Client Has Omitted a Significant Disclosure from the Financial

question 50

Multiple Choice

A client has omitted a significant disclosure from the financial statements.The auditor has asked the client to include the information,but the client refuses and claims the information is confidential.The position of the CPA should be that the information

• A) cannot be considered confidential if it is necessary to the completeness of the financial statements.
• B) cannot be considered confidential unless it can be covered by the attorney-client privilege.
• C) is confidential and will only be disclosed under subpoena or for a regulatory investigation.
• D) should be discussed with the audit committee to determine if the information should be disclosed.

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Definitions:

Automating

The process of using technology to perform tasks without human intervention, often resulting in increased efficiency and reduced error.

Payback Period

The time it takes for an investment to generate cash flows sufficient to recover its initial cost.

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its useful life in equal annual amounts.

Proposed Investment

A planned or suggested allocation of financial resources into a project or asset with an expectation of generating returns in the future.