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An auditor is reporting on condensed financial statements for an annual period that are derived from the audited financial statements of a publicly-held entity. The auditor's opinion should indicate whether the information in the condensed financial statements is fairly stated in all material respects:
a. In conformity with accounting principles generally accepted in the United States of America.
b. In relation to the complete financial statements.
c. In conformity with an other comprehensive basis of accounting.
d. In relation to supplementary filings under federal security statutes.
Answer: "b" is correct. The auditor should report whether the information in the condensed financial statements is fairly stated, in all material respects, in relation to the financial statements from which it has been derived.
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