For a Continuing Audit Client,when a Complete Set of Financial

question 73

Multiple Choice

For a continuing audit client,when a complete set of financial statements is presented on a comparative basis for two years,the auditors' opinion would refer to:

• A)Only the current year under audit.
• B)Either one or both years at the option of the auditors.
• C)Each of the two years plus the preceding year.
• D)Each of the years in the two-year period.

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Definitions:

Times

This term in a financial context often relates to ratios, such as the "times interest earned" ratio, which measures a company's ability to meet its debt obligations based on its earnings before interest and taxes.

Compensating Balance

A minimum account balance that a borrower must maintain as a condition for a bank loan, often to compensate the bank for extending credit.

Interest Rate

Interest Rate is the proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the loan outstanding.

Effective Annual Interest Rate

The real return on an investment after accounting for the effect of compounding interest over a period.