The Auditor Will Do Which of the Following When the Results

question 12

Multiple Choice

The auditor will do which of the following when the results of sample testing conclude that there is misstatement in excess of the tolerable misstatement?

• A)Issue a disclaimer of opinion.
• B)Throw out the sample.
• C)Propose adjustments to the client.
• D)Disclose the misstatement in the client's financial statements.

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Definitions:

Secondary Market

A market where investors purchase securities or assets from other investors, rather than from issuing companies directly.

Original Issuance

The first time that securities, such as stocks or bonds, are offered for sale to the public or private investors.

Securities

Financial instruments that represent ownership positions in corporations, creditor relationships with corporations or governmental bodies, or rights to ownership as represented by an option.

Capital Structure

Refers to the way a company finances its assets through a combination of debt, equity, and other securities.