An Auditor Would Issue an Adverse Opinion If

question 12

Multiple Choice

An auditor would issue an adverse opinion if:

• A)a qualified opinion cannot be given because the auditor lacks independence.
• B)the audit was begun by other independent auditors who withdrew from the engagement.
• C)the financial report taken as a whole does not fairly present the financial condition and results of operations of the entity.
• D)the restriction on the scope of the audit was significant.

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Definitions:

Aversion

A strong dislike or disinclination towards something, often used in economics in the context of risk aversion.

Overconfidence

The bias in which someone's subjective confidence in their judgements is greater than their objective accuracy.

Framing Effect

A cognitive bias where people react differently to a particular choice depending on how it is presented.

Health Maintenance Organization

A type of health insurance plan that provides healthcare services through a network of doctors and hospitals for a fixed annual fee.