After an Audit Report Containing an Unqualified Opinion on a Nonpublic

question 74

Multiple Choice

After an audit report containing an unqualified opinion on a nonpublic entity's financial statements is issued, the auditor learns that the entity has decided to sell the shares of a subsidiary that accounts for 30 percent of its revenue and 25 percent of its net income. The auditor should

• A) Determine whether the information is reliable and, if it is determined to be reliable, request that revised financial statements be issued.
• B) Notify the entity that the auditor's report may no longer be associated with the financial statements.
• C) Describe the effects of this subsequently discovered information in communications with persons known to be relying on the financial statements.
• D) Take no action because the auditor has no obligation to make any further inquiries.

Understand the impact of technological and market developments on reducing collection float.

Understand the impact of the Internet on the growth of online retailing and banking and its implications for float management.

Identify and explain the components of collection time.

Analyze the basic characteristics of short-term securities.

---

Definitions:

Congressional Committee

A subgroup within the United States Congress tasked with specific duties, including legislation review, policy oversight, and investigations.

Executive Agency

A governmental body under the direct authority of the executive branch, responsible for administering specific legislation.

Interest Group

An organization or group that seeks to influence public policy and decision-making to benefit their particular interests or causes.

Deposit

A deposit is a sum of money placed in a financial institution for safekeeping, which can earn interest over time, commonly used in banking for savings or checking accounts.