When the Audited Financial Statements of the Prior Year Are

question 41

Multiple Choice

When the audited financial statements of the prior year are presented together with those of the current year, the continuing auditor's report should cover

• A) Both years.
• B) Only the current year.
• C) Only the current year, but the prior year's report should be presented.
• D) Only the current year, but the prior year's report should be referred to.

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Definitions:

Debentures

A type of debt instrument that is not secured by physical assets or collateral but is based on the issuer's creditworthiness and reputation.

Junk Bonds

High-yield bonds with a lower credit rating than investment-grade bonds, reflecting a higher risk of default.

Industrial-Development Bond

A government-issued bond to support the development of industrial projects, often tax-exempt for the buyer.

Revenue Bond

A type of municipal bond supported by the revenue from a specific project or source, rather than general tax revenues.