Which of the Following Situations Will Not Result in Modification

question 74

Multiple Choice

Which of the following situations will not result in modification of the auditor's report because of a scope limitation?

• A) Restriction imposed by the client.
• B) Reliance placed on the report of another auditor.
• C) Inability to obtain sufficient appropriate evidential matter.
• D) Inadequacy in the accounting records.

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Definitions:

Retention Ratio

The proportion of net income that is retained by a company rather than distributed to shareholders as dividends.

Sustainable Growth Rate

The maximum growth rate a firm can achieve without having to finance growth with additional equity or debt.

Quebec Firm

Refers to a business organization that is registered or operates in Quebec, Canada, subject to provincial laws and regulations.

Equity Value

The value of a company’s shares; it represents the residual value to shareholders after debts and liabilities have been settled.