When Auditors Conclude That a Material and Pervasive Departure from GAAP

question 1

Multiple Choice

When auditors conclude that a material and pervasive departure from GAAP exists in an entity's financial statements,which of the following phrases would most likely be included in their report?

• A)"Do not present fairly in all material respects".
• B)"Except for the effects of the departure from generally accepted accounting principles,as discussed in the preceding paragraph".
• C)"We were engaged to audit the accompanying financial statements".
• D)"As a result of the departures discussed in the following paragraph".

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Definitions:

Negative Feelings

Emotional states that are unpleasant or disturbing to the individual, such as sadness, anger, or fear.

Deep Sense

A profound understanding or intuitive knowledge of a situation, person, or subject.

Dramaturgical Perspective

Using the theater as a metaphor, the idea that people, like actors, perform according to a script. If we all know the script and play our parts well, then like a successful play, our social interactions flow smoothly and seem meaningful, and each actor benefits.

Concert-Hall

A large public building designed for the performance of concerts, equipped with an audience area and a stage for musicians.