Under Which of the Following Sets of Circumstances Might an Auditor

question 18

Multiple Choice

Under which of the following sets of circumstances might an auditor disclaim an opinion?

• A)There are significant uncertainties affecting the financial report.
• B)There has been a material change between periods in the method of the application of accounting principles.
• C)The principal auditor decides to make reference to the report of another auditor who disclaimed an opinion on the audit of a subsidiary.The subsidiary contributed 6 per cent of operating revenue and profit but very little in other aspects.
• D)The financial report contains a departure from generally accepted accounting principles, the effect of which is material.

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Definitions:

Horizon

The line at which the earth's surface and the sky appear to meet, or metaphorically, the limit of a person's knowledge, experience, or interest.

Elliptical

Having an oval shape or relating to an ellipse; also used metaphorically to describe speech or writing that is obscure or lacks completeness.

Perceptual Constancy

The brain's ability to perceive objects as unchanging despite changes in viewing conditions, such as distance or lighting.

Retinal Images

Images formed on the retina of the eye as the result of the refraction of light by the cornea and lens.