An Entity's Comparative Financial Statements Include the Financial Statements of the Prior

question 54

Multiple Choice

An entity's comparative financial statements include the financial statements of the prior year that were audited by a predecessor auditor whose report is not presented.If the predecessor's report was qualified,the successor should

• A)Issue an updated comparative report indicating the involvement of component auditors.
• B)Explain to the client that comparative financial statements may not be presented under these circumstances.
• C)Express an opinion only on the current year's financial statements and make no reference to the prior years' statements.
• D)Indicate the substantive reasons for the qualification in the predecessor auditors' opinion.

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Definitions:

Similarity

a principle in psychology and various sciences that objects or patterns that are similar to each other are more likely to be grouped together by the perception system.

Executive Function

A set of cognitive processes including attentional control, inhibitory control, working memory, and cognitive flexibility, critical for reasoning and problem-solving.

Association

A connection or link between two units or elements.

Motor Areas

Regions of the brain involved in the planning, control, and execution of voluntary movements.