In an engagement to express an opinion on one or more specified elements, accounts, or items of a financial statement, the auditor can generally audit only those specified elements and not the entire set of financial statements. However, the auditor is required to audit the entire set of financial statements if the elements specified include:
A)net income.
B)stockholders' equity.
C)net income and stockholders' equity.
D)assets.

Question

Quizplus · Accepted Answer

If the elements specified include net income and stockholders' equity, the auditor is required to audit the entire set of financial statements. Therefore, option C is the correct choice. Options A, B, and D are incorrect because they do not include both net income and stockholders' equity, and therefore do not trigger the requirement to audit the entire set of financial statements.

In an Engagement to Express an Opinion on One or More