After the Balance Sheet Date but Prior to Issuance of the Auditor's

question 156

Multiple Choice

After the balance sheet date but prior to issuance of the auditor's report the auditor learns that the client's facility in a foreign country has been expropriated. Management refuses to disclose this information in a financial statement footnote or present pro-forma data as to the effect of the event. The auditor should

• A) add a footnote to the financial statements.
• B) disclaim an opinion due to the client-imposed scope limitation.
• C) provide the information in the report and modify the opinion.
• D) issue an unqualified opinion but provide the information in the auditor report.

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Definitions:

Capital Offense

A crime punishable by death or life imprisonment, typically reserved for the most serious offences like murder or treason.

Maximum Penalty

The most severe punishment that can be imposed for a particular offence by a court of law.

Life Imprisonment

A sentence of imprisonment for a crime where the convicted person is to remain in prison for the rest of their life.

Serious Crime

A criminal offense that is considered severely harmful to individuals or society, typically involving violence or the threat of violence, and carrying heavy penalties.