A Client Has Capitalizable Leases but Refuses to Capitalize Them

question 38

Multiple Choice

A client has capitalizable leases but refuses to capitalize them in the financial statements.Which of the following reporting options does an auditor have if the amounts pervasively distort the financial statements?

• A)Qualified opinion.
• B)Unmodified opinion.
• C)Disclaimer of opinion.
• D)Adverse opinion.

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Definitions:

Contingency

A future event or circumstance that is possible but cannot be predicted with certainty, often used in psychology to describe the relationship between behavior and its consequences.

DRO

Differential Reinforcement of Other behavior, a technique used in behavioral therapy to encourage the occurrence of desired behaviors by only rewarding behaviors other than the undesirable one.

Variable-Ratio

A reinforcement pattern in which a reaction is rewarded following a random number of responses, resulting in consistent and elevated rates of response.

Fixed-Ratio

A reinforcement schedule where a response is reinforced only after a specified number of responses have occurred.