ABC Company Prepares Financial Statements Showing the Last Two Years,years

question 45

Multiple Choice

ABC Company prepares financial statements showing the last two years,years X and Y (Year X is the year prior to year Y) .The auditor performed an audit of year X and a review of year Y.The auditor may

• A)report on the year Y review and reissue the year X audit report.
• B)provide only the report concerning the year Y review.
• C)reissue the year X audit report with an explanatory paragraph disclosing that only a review was performed on year Y.
• D)notify the client that prior year audited financial statements cannot be presented when the current years statements have not been audited.

---

Definitions:

Price Of Capital

The cost of using capital goods in production, which includes interest rates paid on loans or the rate of return required by investors on capital.

Price Of Labor

The wage or compensation given to workers for their labor, often determined by skill level, demand, and market conditions.

Isocost

A line representing all combinations of inputs that can be purchased for the same total cost, given input prices.

Total Expenditures

The sum of all spending incurred by individuals, firms, or the government within a specific period.