Auditors Found That the Entity Has Not Capitalized a Material

question 70

Multiple Choice

Auditors found that the entity has not capitalized a material amount of leases in the financial statements.When considering the overall materiality of this departure from GAAP,the auditors would choose which reporting options?

• A) Unqualified opinion or disclaimer of opinion.
• B) Unqualified opinion or qualified opinion.
• C) Explanatory paragraph with unqualified opinion or an adverse opinion.
• D) Qualified opinion or adverse opinion.

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Definitions:

Perfectly Inelastic

A situation in economics where the quantity demanded or supplied does not change regardless of changes in price.

Elasticity

A measure in economics that denotes the responsiveness of the quantity demanded or supplied of a good or service to a change in its price.

Product Uses

The various applications or purposes for which a product is intended or can be utilized by consumers.

Unit Elasticity

A situation in economics where a change in the price of a good or service results in a proportionally equal change in the quantity demanded or supplied.