Which of the Following Does Not Result in a Modification

question 37

Multiple Choice

Which of the following does not result in a modification of a compilation report?

• A)A lack of independence on the part of the auditors.
• B)A departure from generally accepted accounting principles.
• C)A lack of adequate disclosure in the financial statements.
• D)A lack of consistent application of generally accepted accounting principles.

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Definitions:

IFRS

International Financial Reporting Standards; a set of accounting standards developed by the International Accounting Standards Board (IASB) aiming at standardizing financial reporting across the globe.

Liquidity

A measure of a company's ability to pay off its short-term liabilities with its available cash and quick assets.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or within the business's normal operating cycle if longer.

Operating Cycle

The average period of time it takes for a business to convert its inventory into cash through sales.