Sunday, September 11, 2011

Audit Reports, Topic 3: Reports on Audited Financial Statements

12.  Under which of the following circumstances would a disclaimer of opinion not be appropriate?

a.  The auditor is unable to determine the amounts associated with an employee fraud scheme.
b.  Management does not provide reasonable justification for a chance in accounting principles.
c.  The client refuses to permit the auditor to confirm certain accounts receivable or apply alternative procedures to verify their balances.
d.  The chief executive officer is unwilling to sign the management representation letter.

Answer:  b.

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