Exam 19: Audit Reports on Financial Statements

The least severe type of report for disclosing departures from an unmodified report is the

The audit report date is important to users because it indicates the last day

The primary auditor who relies on a secondary auditor

Under Canadian Auditing Standards,the introductory paragraph of the independent auditor's report for a corporation indicates that the auditor has audited the statement of financial position,the income statement,the statement of cash flows,a summary of accounting policies and notes,and

Whenever the client imposes restrictions on the scope of the audit,the auditor should be concerned about the possibility that management is trying to prevent discovery of misstated information.In such cases,which type of report should be issued?

Your client,Huge Telephone Company (HTC),has encountered troubled times,due to deregulation.There is competition for local telephone business and long distance telephone business.The high speed lines for internet access provided via the telephone network have not been selling as well as expected.A new quirk is that many large cities are going to provide free wireless services by installing wireless transmitters on telephone poles,and is only offering to pay a pittance for the use of the telephone poles.HTC has been able to retain reasonable profits by cutting staff to a bare minimum and outsourcing many services. However,due to several labour contracts and federal legislation that will increase services,you have doubts about the ability of the company to renew a major bond issue this coming year. Required: How does the above information affect the audit report?

Beem & Lord,a PA firm,audited the financial statements of Frazer Inc.Since this was a first time audit,Beem & Lord did not audit the comparative financial statements,as this was done by the previous auditor.Beem & Lord should expand their report to include an explanation in

A misstatement in the financial statements can be considered material if

The most common type of audit report contains

Management has several responsibilities that are important to the auditor.One of these is that management is responsible for

Give an example of the key audit matters paragraph for a first year audit.

An auditor has found that the client is suffering financial difficulty and that the going-concern status is seriously in doubt.The client has not placed good disclosures in the financial statements.Which of the following audit report alternatives must the PA choose?

Explain four different variations that could occur in unmodified audit reports.For each variation,state how the auditor's report is affected and provide an example.

It is the responsibility of an auditor to include this in an audit report:

As a result of management's refusal to permit the auditor to physically examine inventory,the auditor has not accumulated sufficient evidence to conclude whether financial statements are stated in accordance with ASPE (Accounting Standards for Private Enterprises).The auditor must depart from the unmodified audit report because

What are key audit matters,and what is stated by the auditors in the audit report under the section of key audit matters?

Your client is a large financial institution in Canada.Canadian regulators require that financial statements for such institutions have an audit report that provides an opinion on the consistency of accounting policies.How do these events affect the independent auditor's report?

As per CAS 705,what are the causes of financial misstatements?

When a misstatement in the financial statements would affect a user's decision but the overall statements are still fairly stated,it would be appropriate to issue

The client has presented all required financial statements with the exception of the statement of cash flows.The auditor has completed the audit and is satisfied that everything,with the exception of the missing statement,is presented fairly.As a result,the auditor would likely issue