If the Auditor Obtains Knowledge About Subsequent Events That Might

question 84

Multiple Choice

If the auditor obtains knowledge about subsequent events that might have a material and adverse effect on the internal control over the financial reporting process,he should

• A)issue an adverse opinion on the effectiveness of internal controls over financial reporting
• B)not consider the information as the subsequent period is beyond the reporting period
• C)include this information in an "other matters" paragraph
• D)include this information in an "emphasis of a matter" paragraph

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Definitions:

Multiplier

An economic factor that quantifies the effect of a change in fiscal or monetary policy on the overall economy, such as how an increase in government spending can lead to a larger increase in national income.

Crowding out

A situation where increased government spending leads to reduced investment in the private sector due to higher interest rates or competition for resources.

Government Purchases

Expenditures by government entities on goods and services that are used to provide public services or to benefit the country's economy.

Federal Reserve

The central banking system of the United States, responsible for monetary policy, regulation of the banking industry, and stability of the financial system.