Question

How would the auditor categorize a situation when the financial statements do not contain a footnote the auditor believes is necessary for fair presentation?

a. A scope limitation.
b. An uncertainty.
c. A departure from GAAP.
d. An act discreditable.

Answer 1

The auditor would categorize this situation as a departure from GAAP.

Step-by-step explanation:

The auditor would categorize a situation when the financial statements do not contain a footnote the auditor believes is necessary for fair presentation as a departure from GAAP. Generally Accepted Accounting Principles (GAAP) are a set of standards and guidelines that auditors use to ensure the accuracy and transparency of financial statements. When a necessary footnote is missing, it indicates a departure from these standards and may result in a misrepresentation of the financial information.