In the First Audit of a Client,because of the Client's

question 26

Multiple Choice

In the first audit of a client,because of the client's record retention policies,an auditor was not able to gather sufficient evidence about the consistent application of accounting principles between the current and the prior year,as well as the amounts of assets or liabilities at the beginning of the current year.If the amounts in question could materially affect current operating results,the auditor would

• A) Be unable to express an opinion on the current year's results of operations and cash flows.
• B) Express a qualified opinion on the financial statements because of a client-imposed scope limitation.
• C) Withdraw from the engagement and refuse to be associated with the financial statements.
• D) Specifically state that the financial statements are not comparable to the prior year because of an uncertainty.

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Definitions:

Excess Supply

The situation in which the quantity of a good or service offered by producers exceeds the quantity demanded by consumers at a given price, often leading to a decrease in prices.

Market Price

The current price at which a good or service can be bought or sold, determined by the intersection of demand and supply forces in the market.

Quantity Demanded

The total amount of goods or services that consumers are willing and able to purchase at a given price in a specific time period.

Quantity Supplied

The quantity of a product or service that suppliers are ready and capable of selling at a particular price during a certain timeframe.