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An Opinion Based in Part on the Report of Another

question 26

True/False

An opinion based in part on the report of another auditor requires an explanatory/emphasis-of-matter paragraph be added to the standard unqualified/unmodified audit report.


Definitions:

Conversion Ratio

A ratio set at the time bonds are issued; determines the number of shares that can be exchanged for a bond.

Bond Rating

An evaluation made by credit rating agencies regarding the credit worthiness of a corporation's or government's debt issues, reflecting the likelihood of default.

Yield To Maturity

The total expected return on a bond if held to its maturity date, taking into account both interest payments and capital gains or losses.

Premium

The amount paid for an insurance policy or an additional amount above the nominal or face value of securities.

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