CAF-8 · Chapter 11 · Question 9 of 10
If an auditor is unable to obtain sufficient appropriate evidence regarding a significant undisclosed related party transaction, how might this impact the audit report?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) They may need to qualify the opinion or issue a disclaimer if the matter is material and pervasive.
Explanation
A limitation on scope regarding material and potentially pervasive undisclosed transactions leads to a modified audit opinion.
More Related Party Transactions MCQs
- Q1According to ISA 550, why do Related Party (RP) transactions pose a higher risk of material misstatement?
- Q2Management claims that all transactions with its parent company were conducted on 'Arm’s Length' terms. What is the auditor's…
- Q3Which of the following is an example of a Related Party for a corporate audit client?
- Q4During the audit, the auditor discovers a significant transaction with a company that was not disclosed as a related party by management…
- Q5Which of the following audit procedures would most likely help an auditor identify undisclosed related party transactions?