Which of the Following Statements Accurately Describes the Auditor's Reporting

question 18

Multiple Choice

Which of the following statements accurately describes the auditor's reporting responsibility for a financial statement audit?

• A)The auditor will state explicitly whether the financial statements are fairly presented in accordance with the applicable financial reporting framework.
• B)The auditor will identify in the auditor's report those circumstances in which auditing principles have not been consistently observed in the current period in comparison to the preceding period.
• C)The auditor will review adjusting journal entries for accuracy,and if the auditor concludes those entries are not reasonably accurate,the auditor must so state in the auditor's report.
• D)The auditor will express an unqualified opinion on the financial statements or will conduct additional audit procedures until such an opinion can be expressed.

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Definitions:

Inventory Costing

The method used to assign costs to inventory, affecting the cost of goods sold and ending inventory valuations.

Ending Inventory

The total value of all inventory that a company has in stock at the end of an accounting period.

Liabilities

Financial obligations or debts owed by a company to creditors, typically classified as either current or long-term.

Contingent Liability

A potential obligation that may be incurred depending on the outcome of a future event or set of circumstances.