Green, CPA, Was Engaged to Audit the Financial Statements of Essex

question 13

Multiple Choice

Green, CPA, was engaged to audit the financial statements of Essex Corporation after its fiscal year had ended. The timing of Green's appointment as auditor and the start of field work made confirmation of accounts receivable by direct communication with the debtors impracticable. Green applied other procedures and was satisfied as to the reasonableness of the account balances. Green's auditor's report most likely contained a(n) ________.

• A) unqualified opinion
• B) unqualified opinion with an explanatory paragraph
• C) qualified opinion due to a scope limitation
• D) qualified opinion due to a departure from generally accepted auditing standards

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Definitions:

Responsiveness Spectrum

(new definition) Refers to the continuum of adaptability levels a company can exhibit, from highly reactive to changes in the market to relatively unresponsive.

Product Development Strategy

A plan of action for creating new products or improving existing ones to meet market demands and achieve competitive advantage.

New Products

Items that have been introduced to a market for the first time or significantly improved in terms of technology, composition, or usability.

Indirect Activity

Activities that support the production process but do not directly contribute to the final product or service.