A Client Has Omitted a Significant Disclosure from the Financial

question 27

Multiple Choice

A client has omitted a significant disclosure from the financial statements.The auditor has asked the client to include the information,but the client refuses and claims the information is confidential.The position of the CPA should be that the information

• A) Cannot be considered confidential if it is necessary to the completeness of the financial statements.
• B) Cannot be considered confidential unless it can be covered by the attorney-client privilege.
• C) Is confidential and will be disclosed only under subpoena or for a regulatory investigation.
• D) Should be discussed with the audit committee to determine whether the information should be disclosed.

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Definitions:

Economic Value

The value of an asset derived from its ability to generate income, benefits, or utility for its owner.

Reference Value

A baseline number or set of numbers used for comparison purposes in analysis.

Differentiation Value

The unique attributes or benefits that make a product or service stand out from competitors in the eyes of consumers.

Unit Product Cost

The total cost (variable and fixed) incurred to produce, store, and sell one unit of a product.