If a Subsequent Event That Has a Material Effect on ICFR

question 48

Multiple Choice

If a subsequent event that has a material effect on ICFR is discovered after the financial report date, but existed at year-end, the duty of the auditor is to:

• A) disclose the event in the audit report and issue a qualified opinion.
• B) disclose the event in the audit report and issue an adverse opinion on the ICFR.
• C) disclose the event in the audit report and add an explanatory paragraph.
• D) depending on the circumstances, the auditor may choose any of the above.

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Definitions:

Self-Actualization

When a person is completely satisfied with his or her life.

Habitual Decision Making

A type of consumer behavior characterized by little or no conscious effort, often because of brand loyalty or the routine nature of the product.

Internal Sources

Information or resources that come from within an organization, such as employee knowledge, company databases, or internal reports.

External Sources

These are the outside entities or information not within the organization that can influence or provide data for business decisions, including market trends and competitor analysis.