When an Audited Financial Report Is Presented in a Document

question 49

Multiple Choice

When an audited financial report is presented in a document containing other information, the auditor:

• A)has an obligation to perform auditing procedures to corroborate the other information.
• B)is required to issue a qualified opinion if the other information has a material misstatement of fact.
• C)should read the other information to consider whether it is inconsistent with the audited financial report.
• D)has no responsibility for the other information because is not part of the basic financial report.

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Definitions:

Inventories

Assets held for sale in the ordinary course of business, or goods that will be used or consumed in the production of goods to be sold.

Gross Profit

The difference between revenue and the cost of goods sold before deducting operating expenses, interest, and taxes.

Operating Expenses

Costs related to the primary activities of a business, excluding costs of goods sold.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold in a company, including the cost of materials and labor.