Green,CPA,was Engaged to Audit the Financial Statements of Essex Co

question 22

Multiple Choice

Green,CPA,was engaged to audit the financial statements of Essex Co.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:

1934 Act

Refers to the Securities Exchange Act of 1934, which regulates the trading of securities such as stocks and bonds in the U.S. and established the Securities and Exchange Commission.

Issuer

An entity that develops, registers, and sells securities to finance its operations, which can be corporations, governments, or municipal bodies.

Investors

People or organizations that invest money with the aim of achieving financial gains.

Rule 10b-5

A regulation enacted under the Securities Exchange Act of 1934 that prohibits any act or omission resulting in fraud or deceit in connection with the purchase or sale of any security.