In Which One of the Following Instances Would an Auditor

question 46

Multiple Choice

In which one of the following instances would an auditor most likely issue a disclaimer of opinion?

• A) Management will not sign a management representation letter.
• B) Management declines to provide a statement of cash flow.
• C) The auditor is independent of the client.
• D) The auditor is unable to confirm receivables but performs alternative procedures.

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Definitions:

Bowed Outward

A description of the shape of a curve on a graph, such as the production possibilities frontier, indicating increasing opportunity costs.

Opportunity Cost

The penalty of dismissing the closest superior alternative when engaging in the process of decision-making.

Production Possibilities Frontier

A curve depicting all maximum output possibilities for two or more goods given a set of inputs (resources, technology).

Strike

A work stoppage caused by the mass refusal of employees to work, usually in an attempt to gain better wages or working conditions.