Delta Life Insurance Co

Multiple Choice

Delta Life Insurance Co. prepares its financial statements on an accounting basis insurance companies use pursuant to the rules of a state insurance commission. If Wall, CPA, Delta's auditor, discovers that the statements are not suitably titled, Wall should:

A) Disclose any reservations in an explanatory paragraph and qualify the opinion.
B) Apply to the state insurance commission for an advisory opinion.
C) Issue a special statutory basis report that clearly disclaims any opinion.
D) Explain in the notes to the financial statements the terminology used.