An Auditor Expresses an Unqualified Opinion on the Financial Statements

Multiple Choice

An auditor expresses an unqualified opinion on the financial statements of a publically held client. Subsequent to the audit, the client files for bankruptcy protection. If the bankruptcy was caused by poor internal controls at a service provider, the auditor may use as a valid defense which of the following?

A) It relied on the work of another auditor.
B) It extended its testing of the client's internal control environment.
C) It extended its testing of client internal controls by performing tests of controls at the service provider.
D) Any of the above depending on the circumstances.