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:

Nominal Damages

Nominal damages are a small sum of money awarded to a plaintiff in a lawsuit, acknowledging that a legal right has been violated, but no substantial harm was suffered.

Tort

A non-criminal action causing damage or injury to another party, which subjects the wrongdoer to legal accountability through the system of torts.

Compensable Damages

Damages that a plaintiff can recover in a lawsuit, representing monetary compensation for loss or injury.

Punitive Damages

Monetary compensation awarded to a plaintiff, above and beyond actual damages, to punish the defendant for egregious conduct.