Which of the Following Would Not Require an Explanatory/emphasis-Of-Matter Paragraph

question 11

Multiple Choice

Which of the following would not require an explanatory/emphasis-of-matter paragraph in the auditor's report?

• A) Additional emphasis.
• B) Lack of consistency in the financial statements due to accounting changes.
• C) Going concern.
• D) Opinion based in part on the report of another auditor.

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Definitions:

Effective Annual Rate

This is the interest rate on an investment or loan that accounts for the effects of compounding over a given period, providing a more accurate picture of financial returns or costs.

Monthly Compounding

The process of calculating interest earnings on the principal and previously earned interest every month.

Nominal Annual Interest Rate

The stated interest rate of a bond or loan, not adjusted for inflation, which indicates the periodic interest payment.

Payment Plans

Agreements outlining how a borrower will pay back a loan or an installment purchase over a specified time period.