If the Predecessor Auditors Do Not Reissue Their Audit Report

question 71

Multiple Choice

If the predecessor auditors do not reissue their audit report on comparative financial statements,the successor auditors should:

• A)Express a qualified opinion on the comparative financial statements audited by the predecessor auditors.
• B)Reproduce the predecessor auditors' report and include it with the new set of financial statements.
• C)Have the client omit the comparative financial statements.
• D)Refer to the report of the predecessor auditors.

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Definitions:

Joint Operation

A business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task, where each participant is jointly responsible for profits, losses, and costs.

Supply Of Services

The action of providing services to consumers or businesses, which can involve physical labor or intellectual tasks.

Profit Recognition

The accounting process of recording revenue when it is earned and realizable, in accordance with the principle of revenue recognition.

Joint Operation

A business activity shared between two or more entities where they work together on a project but do not form a new entity.