An Auditor Concludes That There Is a Material Inconsistency in the Other

question 71

Multiple Choice

An auditor concludes that there is a material inconsistency in the other information in an annual report to shareholders containing audited financial statements.If the auditor concludes that the financial statements do not require revision,but the entity refuses to revise or eliminate the material inconsistency,the auditor may

• A) issue an "except for" qualified opinion after discussing the matter with the entity's board of directors.
• B) consider the matter closed since the other information is not in the audited financial statements.
• C) disclaim an opinion on the financial statements after explaining the material inconsistency in a separate explanatory/emphasis-of-matter paragraph.
• D) revise the auditor's report to include a separate explanatory/emphasis-of-matter paragraph describing the material inconsistency.

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Definitions:

Decompression Melting

The process where melting occurs in upwelling mantle material as it experiences lower pressures without a corresponding decrease in temperature, leading to magma formation.

Mantle-Derived Magmas

Magma that originates from the melting of the Earth's mantle, leading to volcanic activity.

Continental Crust

The layer of igneous, sedimentary, and metamorphic rocks that forms the continents and continental shelves, characterized by its thickness and composition distinct from oceanic crust.

Mafic Basalt

A type of basaltic rock that is rich in magnesium and iron, characterized by its dark color and low silica content.