In Which of the Following Circumstances Would an Auditor Be

question 55

Multiple Choice

In which of the following circumstances would an auditor be most likely to express an adverse opinion on a company's financial statements?

• A)The client has had significant transactions with related entities that the auditor wants to emphasize.
• B)The financial statements are not in conformity with FASB requirements regarding the capitalization of leases.
• C)The auditor is not independent.
• D)There is substantial doubt about the entity's ability to continue as a going concern.

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Definitions:

Grapevine Information

Informal communication that spreads quickly and is not officially sanctioned by organizational leadership.

Bond Of Trust

A foundational relationship built on reliability, integrity, and confidence between individuals or within a group.

Gossip

Informal or idle talk about others, typically involving details that are not confirmed as being true.

Grapevine

An informal communication channel within an organization, where information is spread through personal contacts and conversations rather than through official means.