If the Auditors Obtain Sufficient Appropriate Evidence on the Entity's

question 49

Multiple Choice

If the auditors obtain sufficient appropriate evidence on the entity's accounts receivable balance by using alternative procedures because it is impracticable to confirm accounts receivable,the opinion on the entity's financial statements should be unqualified and would

• A) Disclose the fact that alternative procedures were used due to client-imposed scope limitation.
• B) Disclose in the opinion paragraph that confirmation of accounts receivable was impracticable.
• C) Not mention the alternative procedures.
• D) Include an explanatory paragraph that discloses the performance of alternative procedures.

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Definitions:

Projected Future Sales

An estimate of the amount of sales or revenues that a company expects to achieve in a future period.

Debt-Equity Ratio

An index showing the relative financing contribution of equity and debt to a company's assets.

Growth Rate

The rate at which a company's sales, earnings, dividends, or other financial indicators increase over a period of time.