Joshua Hanson Knew That His Clients Financial Statements Were Misstated

question 54

Multiple Choice

Joshua Hanson knew that his clients financial statements were misstated but the misstatement was not pervasive. What kind of audit report was he considering?

• A) qualified opinion
• B) emphasis of matter
• C) compilation
• D) none of the above

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Definitions:

Cost Method

An accounting method where the investment is recorded at its acquisition cost, with no subsequent changes for increases or decreases in value.

Fiscal Year

A one-year period adopted by businesses and governments for accounting and financial reporting, which may or may not align with the calendar year.

Preferred Stock

A class of stock that offers its holders priority over common stockholders in the distribution of dividends and assets.

Common Stock

Equity ownership in a corporation, with the right to vote on corporate matters and receive dividends.