Question

An investor is reading the financial statements of the Stankey Corporation and observes that the statements are accompanied by an auditor's unqualified report. From this, the investor may conclude that

A. Any disputes over significant accounting issues have been settled to the auditor's satisfaction.
B. The auditor is satisfied that Stankey will be highly profitable in the future.
C. The auditor is certain that Stankey's financial statements have been prepared accurately and that all account balances are precisely correct.
D. The auditor has determined that Stankey's management is not qualified to lead the company.

Answer 1

An investor may conclude that the auditor is certain that Stankey's financial statements have been prepared accurately and that all account balances are precisely correct.

Step-by-step explanation:

An investor can conclude that the auditor is certain that Stankey's financial statements have been prepared accurately and that all account balances are precisely correct. This is indicated by the auditor's unqualified report, which means that the financial statements are free from material misstatements or errors. However, it does not provide any information about disputes over significant accounting issues, future profitability of the company, or qualifications of the management.