Several Months After an Unqualified Audit Report Was Issued, the Auditor

question 30

Multiple Choice

Several months after an unqualified audit report was issued, the auditor discovers the financial statements were materially misstated. The client's CEO agrees that there are misstatements, but refuses to correct them. She claims that "confidentiality" prevents the CPA from informing anyone.

• A) The CEO is correct and the auditor must maintain confidentiality.
• B) The CEO is incorrect, but because the audit report has been issued it is too late.
• C) The CEO is correct, but to be ethically correct the auditor should violate the confidentiality rule and disclose the error.
• D) The CEO is incorrect, and the auditor has an obligation to issue a revised audit report, even if the CEO will not correct the financial statements.

Calculate the future value of ordinary general annuities.

Determine the present value of ordinary general annuities.

Calculate minimum sustenance amount from annuities.

Calculate the amount a finance company would pay for conditional sale contracts based on required rates of return.

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Definitions:

Thermal Equilibrium

A state in which all parts of a system are at the same temperature, resulting in no net flow of thermal energy.

Static Equilibrium

A state in which an object or system is at rest or moving with constant velocity, experiencing no net force.

The Joule

A derived unit of energy in the International System of Units (SI), equal to the energy transferred to an object when a force of one newton acts on it in the direction of its motion through a distance of one meter.

The Calorie

A unit of energy defined as the amount of heat needed to raise the temperature of one kilogram of water by one degree Celsius.