In which of the following situations would an auditor choose between a qualified and an adverse opinion?

Shell is a customer of Beach Co. and had an outstanding accounts receivable balance of $20,000 at December 31, 2025. You sent an A/R confirmation and Shell wrote back saying their balance as of 12/31/2025 was $1,000. You determine that on December 30, 2025, Shell mailed a check to Beach Co.  for $19,000.  Beach Co. received the check on January 2, 2026. What amount should be recorded in A/R on 12/31/2025 related to Shell Co’s balance?

On 2/13/2026, the audit firm completed their audit procedures and had obtained sufficient appropriate evidence to sign off on the audit report.  On 2/14/2026 an event came to the auditor’s attention that should be disclosed in the footnotes.  The event was properly disclosed by the client in footnote 18 and the financial statements were released on 2/15/2026. Which date option has less liability for the auditor?

The negative form of accounts receivable can be used when the risk of material misstatement is 

Gator Company had financial difficulties for the year ending 12/31/2024 and the auditor included language related to the client’s ability to continue as a going concern in the FY 2024 audit report. Gator Co. is doing much better financially in FY 2025 and there is no longer any substantial doubt about Gator Co’s ability to continue as a going concern as of 12/31/2025.  Two years of financial statements are presented when financial statements and the audit report are released.  What should occur related to auditor reporting?

The sample size of a test of controls moves in the opposite direction (i.e. inversely) with 

The risk of incorrect rejection relates to the 

An auditor reviews the aging schedule of accounts receivable to evaluate whether the allowance for doubtful accounts is reasonable. This procedure primarily tests which assertion?

You sent confirmations to test A/R balances, however some of the customers did not reply. Which of the following procedures provides the best evidence for an A/R balance.

You performed a statistical sampling test over controls related to inventory pricing. The sample size was 100 items. The tolerable deviation rate was 6% and the expected population deviation rate was 5%. You tested 100 items and identified 4 control deviations.  The allowance for sampling risk was 1%.  You would most likely determine that the controls over inventory pricing are