According to the AICPA principles, which of the following is incorrect? d. Auditors should issue an unqualified opinion in all cases where companies have provided an entire set of financial statements and footnotes that include all years presented for comparative purposes. According to the AICPA, the auditor needs to clearly express an opinion based on audit evidence obtained in the form of a written report.This is stated in which AICPA principle governing an audit conducted in accordance with GAAS? According to the AICPA, the auditor needs to form an opinion on the financial statements based on an evaluation of the audit evidence obtained. This is stated in which AICPA principle governing an audit conducted in accordance with GAAS? Adverse opinions can only be issued by auditors based on which of the following? An audit of the Flagler Company, a diamond mining company, brings to light the fact that its equipment has been marked up to the owners' expectation of market values. Such a situation will most likely result in which type of report? Audit reports are designed to promote clear communication between the auditor and the financial statement user. Which of the following is not delineated in the audit report? b. The experience level of the audit team. Auditing reporting standards for financial statement and integrated audits require auditors to provide which of the following? A client company
has a history of negative cash flow trends and continuing losses. Which type of opinion will the auditor most likely issue? b. Unqualified with explanatory language. Disclaimers of opinion can only be issued by auditors based on which of the following? The division of responsibility between the reporting company's management and the audit firm is described in which one of the following? b. Introductory paragraph Adverse opinions affect the standard audit report in which of the following ways? An emphasis of a matter may result in which of the following? d. An unqualified aduit opinion with an explanatory paragraph either before or after the opinion paragraph. How would the auditor categorize a situation when the financial statements do not contain a footnote the auditor believes is necessary for fair presentation? c. A departure from GAAP. If a client expensed the acquisition cost of some assets that should have been capitalized and depreciated them over their useful lives, which of the following would be incorrect? d. An explanatory paragraph should be modified to include language such as: "subject to the qualified act..." If the auditor believes that there is a remote probability that
resolution of an uncertainty will have a b. A standard unqualified opinion. If the auditor decides
to draw attention to large related party transactions occurring in the financial statements of the client, which report will most likely be issued? b. Unqualified with an explanatory paragraph In the audit of consolidated financial statements
under U.S. auditing standards when more than one CPA firm is involved and the principal audit firm chooses to mention the other firm(s), the wording of which paragraph(s) is modified? c. Introductory Paragraph: Yes; Scope Paragraph: Yes; Opinion Paragraph: Yes In which of the following circumstances would an auditor be most likely to express an adverse opinion on a company's financial statements? b. The financial statements are not in conformity with FASB requirements regarding the capitalization of leases. In which
of the following situations would the auditor modify the audit report on ICFR? c. When the auditor concludes that management's report on ICFR is not complete or is improperly presented. In which one of the following cases would an auditor most likely issue a qualified opinion? d. There is one material departure from GAAP that is affects only two accounts. In which one of the following instances would an auditor most likely issue a
disclaimer of opinion? a. Management will not sign a management representation letter. In which one of the following instances would an auditor most likely issue a standard unqualified opinion without explanatory language? d. There is an immaterial deviation from GAAP related to capitalizing repairs. In which one of the following instances would an auditor most likely issue an adverse opinion? c. There is a material dollar misstatement that overshadows the overall financial statements. In which one of the following instances would an auditor not issue a disclaimer of
opinion? b. There are significant misstatements in the financial statements. A justified departure from GAAP may result in which of the following? c. An unqualified audit opinion with an explanatory paragraph before the opinion paragraph or a qualified opinion. A justified departure from GAAP may result in which of the following? b. An unqualified audit opinion with an explanatory paragraph either before or after the opinion paragraph. The opinion paragraph of the audit report for Schnook Co. states that the financial statements "do not present fairly". Which type of audit report is this? PCAOB Auditing Standard 5 does not identify which of
the following situations as one in which the auditor will modify the audit report on ICFR effectiveness? d. When the annual report includes a copy of the annual certification pursuant to Section 302 of the Sarbanes-Oxley Act. Qualified opinions can only be issued by auditors for which of the following? A reference to another auditor under U.S. auditing standards may result in which of the following? d. An unqualfied audit opinion with modified wording for all three paragraphs. Scope limitations resulting in disclaimers under U.S. auditing standards affect the standard audit report through which of the following? The scope paragraph of an unqualified
opinion primarily gives information relating to which of the following? d. Audit planning and procedure. The use of another CPA firm by an audit firm to
perform part of the engagement on a client's subsidiary will require the audit firm to do which of the following? c. Ensure the independence of the other CPA firm of the client. Violations of GAAP resulting in qualified opinions affect the standard audit report through which of the following? When an auditor is faced with a material departure from GAAP that is pervasive,
which of the following should the audit report contain? When an auditor issues an adverse opinion, which of the following should be included in the opinion paragraph? c. A reference to a separate paragraph that describes the reason for the adverse opinion. When an auditor lacks independence with respect to a client, which of the following should the auditor issue? a. A disclaimer of opinion. When financial statements contain a material,
unjustified departure from GAAP, which of the following is contained in the audit report? a. A Qualification: Yes; An Explanatory Paragraph After the Opinion Paragraph: No. When management chooses to include information in its report on ICFR that is in addition to the information required to be provided, what should the auditor do? c. The auditor will disclaim an opinion on that additional information. When might an auditor modify the introductory paragraph and replace the scope paragraph with explanatory paragraph? a. When a scope limitation exists. When the auditor is not independent with respect to a client, what must the auditor do? a. Not accept an audit engagement. When the auditor is unable to obtain sufficient appropriate evidence because the client did not allow a procedure to be completed, which of the following would the report most likely
contain? d. A Qualification: No; An Explanatory Paragraph After the Opinion Paragraph: No. When the auditor wishes to emphasize a matter in the financial statements, which of the following would the audit report contain? c. A Qualification: No; An Explanatory Paragraph After the Opinion Paragraph: Yes. When the financial statements contain a material departure from GAAP that the auditor believes is justified, where should the justification appear? d. In a paragraph added before the opinion paragraph. When there is a restriction on the scope of the internal control over financial reporting (ICFR) engagement, what should the auditor do? a. The auditor will either withdraw from the engagement or disclaim an opinion.
Which of the following is a change that is not being debated by auditing standard setters and investors? d. All of the above are being debated. Which of the following is an example of circumstances that would not limit the audit scope? c. Emphasis of an important matter. Which of the following phrases should not be used when the auditor is qualifying the audit opinion? Which of the following would not result in an unqualified audit report with an explanatory
paragraph? Which one of the following is an example of the contents of an opinion paragraph found in an audit report? c. "The financial statements referred to above present fairly,..." Which one of the following is an instance where the auditor would add a paragraph after the opinion paragraph? a. There is serious doubt that the client can continue as a going concern. Which one of the following is not a type of unqualified audit opinion issued by auditors? d. Does not include the opinion paragraph. |