The Reporting Standards for an Attestation Are Different from That

question 53

Multiple Choice

The reporting standards for an attestation are different from that of an audit because they require

• A)the report to include an opinion.
• B)the report to identify the subject matter of the assertion being reported on.
• C)the report requires a statement that the presentation is not in accordance with GAAP.
• D)the report requires a disclosure of the procedures performed during the attestation.

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Definitions:

Moral Hazard

A situation where one party is more likely to take risks because the negative consequences of the risk will be borne by another party.

Unobservable Actions

Actions taken by parties in a contract or agreement that cannot be directly observed or monitored by others.

Adverse Selection

A situation in which sellers have information that buyers do not, or vice versa, leading to an inefficient market outcome.

Adverse Selection

A situation in economics where one party in a transaction has more or better information compared to the other party, potentially leading to an inequitable outcome.