Which of the Following Situations Would Not Result in Auditors

question 47

Multiple Choice

Which of the following situations would not result in auditors adding an additional paragraph to their report without modifying the introductory,scope,or opinion paragraphs of that report?

• A)Reference to a change in the method of accounting mandated by the issuance of a new accounting standard.
• B)Reference to a going-concern uncertainty facing the entity.
• C)Reference to a departure from GAAP that is material,but not pervasive,to the financial statements.
• D)Reference to an acquisition made by the entity during the most recent fiscal year.

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Definitions:

Health Insurance

A type of insurance coverage that pays for medical and surgical expenses incurred by the insured, often including preventive care, and sometimes dental and vision benefits.

Adverse Selection

A situation where buyers and sellers have different information, leading to the market being dominated by inferior products because higher quality products are squeezed out.

Free Markets

Economic systems in which the prices for goods and services are determined by the open market and consumers, without government intervention.

Moral-Hazard Problem

A situation in which one party engages in risky behavior knowing that it is protected against the risk because another party will incur any resulting costs.