A Significant Customer of the Firm Suffers a Large Economic

question 57

Multiple Choice

A significant customer of the firm suffers a large economic loss after year end, but prior to completion of field work. The audit client believes this event will have material effect on the financial statements. The auditor should:

• A) adjust the financial statements for the year under audit.
• B) add a paragraph to the audit report.
• C) advise the client to disclose the event in the notes to the financial statements.
• D) advise the client to delay issuing the financial statements until the economic loss can be determined.

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Definitions:

Contingency Workers

Employees who do not have long-term or permanent employment contracts, including freelancers, consultants, and temporary contract workers.

Part-Time

Refers to work or employment that is less than the full number of hours defined as standard, typically offering limited hours of work per week.

Permanent Workforce

Employees who are hired for long-term employment, offering stability and continuity within an organization.

Telecommuting

A work arrangement in which employees do not commute to a central place of work, instead working via electronic communications from a remote location, often their home.