Company a Hired Q to Perform Its Year-End Audit

question 33

Multiple Choice

Company A hired Q to perform its year-end audit. Subsequent to the completion of field work, but prior to the issuance of the financial statements, A discovers that one of its customers has filed for bankruptcy protection. Assume that Q decides to perform additional work to determine the affect of the bankrupt customer on A's financial statements, then Q:

• A) should issue a dual-dated report.
• B) should expand the testing procedures and wrap-up work in order to extend the report date.
• C) amend the financial statements with a footnote and issue the audit report as planned.
• D) Either "a" or "b" depending on the amount of additional testing performed.

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Definitions:

Social Sciences

Social sciences are a group of academic disciplines that study societies and the relationships among individuals within those societies, including subjects like sociology, psychology, and economics.

Participant Observation

A research method used in social sciences where the researcher immerses themselves in the community or group being studied to observe behaviors and interactions directly.

Sociologists

Scientists who study societies, including patterns of social relationships, social interaction, and culture.

Social Milieu

The social environment or setting in which an individual lives or operates, consisting of social norms, values, and practices.