Question

Which of the following is NOT a situation in which the auditor wants to draw users' attention to a material matter that is already presented and/or disclosed in the client's financial statements?

A) A major disaster that may not have a significant impact on the company's financial situation
B) Uncertainties relating to the future outcome of litigation
C) Significant subsequent events
D) Material transactions with related parties.

Answer 1

The auditor does not want to draw users' attention to a major disaster that may not have a significant impact on the company's financial situation. Therefore the correct answer is A) A major disaster that may not have a significant impact on the company's financial situation.

Step-by-step explanation:

The situation in which the auditor does not want to draw users' attention to a material matter already presented and/or disclosed in the client's financial statements is A) A major disaster that may not have a significant impact on the company's financial situation. In this case, the auditor may deem that the major disaster does not have a material effect on the financial statements and therefore does not require additional disclosure or attention.