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When Management Is Unable to Provide an Explanation for a Previously

question 79

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When management is unable to provide an explanation for a previously unrecognized risk identified through the review analytical procedures,the auditor must issue an adverse opinion.


Definitions:

Transferring Rights

The act of moving or assigning legal rights or interests from one party to another.

Merchantable

A standard in sales law indicating that goods are fit for the ordinary purposes for which such goods are used.

Average, Fair

An assessment or rating that denotes something as being within an acceptable or middle range of quality or value.

Medium-Grade Quality

Describes products or materials that meet a standard of performance or durability that is considered average or moderate in comparison to others.

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