- CFA Exams
- CFA Level I Exam
- Topic 4. Financial Statement Analysis
- Learning Module 1. Introduction to Financial Statement Analysis
- Subject 3. Regulated Sources of Information
CFA Practice Question
A(n) ______ audit opinion makes analysis of the financial statements easy because the company's financial statements cannot be relied upon.
B. qualified
C. adverse
D. disclaimer
A. unqualified
B. qualified
C. adverse
D. disclaimer
Correct Answer: C
This is because the financial statements materially depart from accounting standards and are not fairly presented.
User Contributed Comments 8
| User | Comment |
|---|---|
| Sailor85 | Wouldn't D be correct as well? Isn't a disclaimer as bad or even worse than having no audit? |
| chessdude | No. A disclaimer does not help to make it easy. |
| sh21 | c is the best option |
| Rivermax | why does having an adverse audit opinion make the analysis easy? I would of thought it would make it harder given unreliable data...... ? |
| reganbaha | because you won't bother analysing the co. with the extra risk from possibly inaccurate FS. Just move on to the next co. |
| assiduous | This is a tricky question. I hesitated to answer C on this one as well. However, if you think carefully, D is no opinion at all. The question clearly asks about an "opinion." I am glad the AN staff included this though as it is the kind of question that forces us to make sure we have mastered the material. With the exception of there being 4 answer choices, I am certain that this is the type of trick question that will present itself on the exam. |
| TheProfet | This question is screwed up. The word "easy" should be replaced with "difficult". In this context, an adverse opinion is the right answer, as a disclaimer is not an opinion at all. |
| HarperWang | What about D? That is the worst and not be represented at all. |