Exam 12: Reports on Audited Financial Statements

When there has been a change in accounting principles, but the effect of the change on the comparability of the financial statements is not material, the auditors should

Auditors will issue an adverse opinion when

In which of the following situations would auditors ordinarily choose between expressing a qualified opinion or an adverse opinion on the entity's financial statements?

If management fails to provide adequate justification for a change from one generally accepted accounting principle to another, the auditors should

When reporting on comparative financial statements, auditors ordinarily should modify their previously expressed opinion on the prior years' financial statements if the

When auditors lack independence, which of the following is true about the report on the entity's financial statements that should be issued?

Which of the following best reflects the auditors' reporting responsibility under generally accepted auditing standards? Other Information Accompanying Required Supplementary the Financial statements Information A. Exception Required B. Exception Exception C. Required Required D. Required Exception

A client has capitalizable leases but refuses to capitalize them in the financial statements. Which of the following reporting options does an auditor have if the misstatements have a material and pervasive effect on the financial statements?

Define a scope limitation and distinguish between client-imposed and circumstance-imposed scope limitations. What reporting options are available to auditors when scope limitations are encountered during the engagement?

Which of the following statements is not included in the Auditor's Responsibilities for the Audit of the Financial Statements Section of the standard (unmodified) report?

The auditors have determined that there is substantial doubt about an entity's ability to continue as a going concern. When considering the appropriateness of management's disclosures and severity of the uncertainty, all of the following reports could be issued, except

"As described in Note 5 to the financial statements, General Express changed its statistical method of computing product warranty expense for the year ended December 31, 20x1…" is an illustration of a

A report that acknowledges reliance on the reports of component auditors is a type of report modification known as a(n)

Under which of the following circumstances would a disclaimer of opinion on the entity's financial statements not be appropriate?

When auditors are engaged to examine an entity's financial statements but decide to issue a disclaimer of opinion because of a scope limitation, the report would not

Auditors most likely would issue a disclaimer of opinion on the entity's financial statements because of

Harris is auditing the financial statements of Cole Corp., an energy company. The FASB requires that these financial statements must be accompanied by supplementary mineral reserve information. If this required information is materially misstated, what type of report should Harris issue?

When audited financial statements are presented in a document containing other information, the auditors should

Which of the following scope limitations would ordinarily be of most concern to the auditors?

When financial statements contain a departure from GAAP, the auditors should explain the unusual circumstances in a separate paragraph and express an opinion that is