The Auditors Conclude That There Is a Material Inconsistency in the "Other

question 72

Multiple Choice

The auditors conclude that there is a material inconsistency in the "other information" in an annual report to shareholders containing audited financial statements.If the auditors conclude that the financial statements do not require revision but the entity refuses to revise or eliminate the material inconsistency,the auditors may

• A) Issue a qualified opinion on the entity's financial statements, citing a departure from generally accepted accounting principles.
• B) Consider the matter closed because the other information is not included in the audited financial statements.
• C) Issue an adverse opinion on the entity's financial statements due to inadequate disclosure.
• D) Revise the report on the entity's financial statements to include a separate explanatory paragraph describing the material inconsistency.

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Definitions:

Horizontal Expansion

A business growth strategy involving the increase of production or the expansion of product lines within the same level of the supply chain.

Vertical Expansion

The growth of a company by acquiring or establishing operations within the same industry but at different stages of the production process.

Skill Variety

Describes the degree to which a job requires a variety of different activities in carrying out the work, involving the use of different skills and talents.

Physical Strength

The measure of an individual's exertion capacity in terms of muscle performance and endurance.