Under Which of the Following Circumstances Would a Disclaimer of Opinion

question 14

Multiple Choice

Under which of the following circumstances would a disclaimer of opinion on the entity's financial statements not be appropriate?

• A)The financial statements fail to contain adequate disclosure of related-party transactions.
• B)The entity refuses to permit its attorney to furnish information requested in an attorney letter.
• C)The auditors are engaged after the date of the financial statements and are unable to observe physical inventories or apply alternative procedures to verify their balances.
• D)The auditors are unable to determine the amounts associated with illegal acts committed by the entity's management.

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Definitions:

Duress

The use of force, pressure, or threats to compel someone to act against their will or better judgment in concluding a contract or performing an act.

Improper Threats

Coercive actions or statements intending to force someone into an agreement or decision against their will, often considered unlawful.

Mistake

An error or misunderstanding that can impact the validity of a contract or agreement.

Agreement

A mutual understanding or arrangement between two or more parties, often formalized by a contract, regarding their rights and responsibilities.