After an Audit Report Containing an Unqualified Opinion on a Nonpublic

question 72

Multiple Choice

After an audit report containing an unqualified opinion on a nonpublic entity's financial statements is issued, the auditor learns that the entity has decided to sell the shares of a subsidiary that accounts for 30 percent of its revenue and 25 percent of its net income. The auditor should:

• A)determine whether the information is reliable and, if it is determined to be reliable, request that revised financial statements be issued.
• B)notify the entity that the auditor's report may no longer be associated with the financial statements.
• C)describe the effects of this subsequently discovered information in communications with persons known to be relying on the financial statements.
• D)take no action because the auditor has no obligation to make any further inquiries.

Understand the role of real options in strategic investment decisions.

Understand the benefits and drawbacks of export promotion and import substitution policies for economic growth.

Analyze the implications of opening economies to free trade for developing countries.

Identify the role of various organizations and programs in coordinating and providing aid.

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Definitions:

Goodwill

An intangible asset that arises when a business is acquired for more than the fair value of its net identifiable assets, reflecting the company's brand, customer base, and other non-physical assets.

Restriction

A rule or condition that limits or controls someone's actions or a particular activity.

Business Elsewhere

The decision by a customer to take their business to a competitor or alternative provider, usually due to dissatisfaction.

Necessary

Items or services considered essential for basic living and survival, often distinguishing between luxury goods and necessities for legal and economic purposes.