Which of the Following Is Correct Concerning Qualified Opinions,disclaimers of Opinions,and

question 11

Multiple Choice

Which of the following is correct concerning qualified opinions,disclaimers of opinions,and unaudited financial statements?

• A)When an auditor issues a qualified opinion regarding audited financial statements,the auditor is relieved of responsibility for mistakes in financial statements only to the extent the qualification is specifically expressed in the opinion letter.
• B)An auditor who,due to the limited scope of an audit,disclaims any opinion as to the ability of the financial statements to present the financial position of a company has no liability for misstatements or omissions in the financial statements.
• C)Opinion letters stating that an auditor totally disclaims his/her liability for false and misleading financial statements excuse an accountant from the duty to exercise ordinary skill and care.
• D)An auditor who prepares unaudited statements automatically creates a disclaimer as to the accuracy of those statements.

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Definitions:

Health Insurance Coverage

A form of insurance that covers the whole or part of the risk of a person incurring medical expenses.

Cafeteria-Style Plans

Flexible benefit plans allowing employees to choose from a variety of pre-tax benefits options to create a package tailored to their personal needs and preferences.

Flexible Spending Accounts

Tax-advantaged accounts that allow employees to save pre-tax dollars for eligible health care and dependent care expenses.

Defined-Benefit Plans

A type of pension plan where an employer promises a specified pension payment upon retirement, which is determined based on the employee’s earnings history, tenure of service, and age.