The Auditors Include an Emphasis-Of-Matter Paragraph in an Otherwise Unmodified

question 66

Multiple Choice

The auditors include an emphasis-of-matter paragraph in an otherwise unmodified report on the entity's financial statements to emphasize that the entity being reported on had significant transactions with related parties.The inclusion of this separate paragraph

• A) is considered a qualification of the opinion.
• B) violates generally accepted auditing standards if this information is already disclosed in footnotes to the financial statements.
• C) necessitates a revision of the opinion paragraph to include the phrase "with the foregoing explanation."
• D) is appropriate and would not otherwise affect the unmodified opinion.

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Definitions:

Flow Chart

A diagram that represents a process, showing the steps as boxes of various kinds, and their order by connecting them with arrows.

Position Chart

A visual representation that outlines the structure of an organization and the relationships and relative ranks of its parts and positions/jobs.

Pattern Diagram

A visual representation that outlines the relationship or structure among various elements of a system or process, used for analysis or design purposes.

Learning Organization

An organization that facilitates the learning of its members and continuously transforms itself to improve and adapt.