Exam 15: Audit Reports on Financial Statements

The most difficult decisions about which opinion to issue are generally centered around decisions based on the materiality level and pervasiveness of GAAP violations, the significance of scope limitations, and the likelihood of the entity being a going concern.

(True/False)

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Question 21

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?

(Multiple Choice)

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Question 22

If the firm auditing a company realizes that it is not independent with respect to the client, it will issue disclaimer of opinion based on the inherent GAAP violation imposed by the audit firm.

(True/False)

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Question 23

Inconsistent application of accounting principles by the client is a GAAP violation and would result in a qualified audit report.

(True/False)

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Question 24

Disclaimers of opinion can only be issued by auditors based on which of the following?

(Multiple Choice)

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Question 25

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?

(Multiple Choice)

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Question 26

Which of the following is an example of circumstances that would not limit the audit scope?

(Multiple Choice)

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Question 27

Under international auditing standards, when the audit client has engaged other audit firms to audit remote locations around the country, the principal auditor must mention the other audit firms in the audit report.

(True/False)

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Question 28

When might an auditor modify the introductory paragraph and replace the scope paragraph with explanatory paragraph?

(Multiple Choice)

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Question 29

Types of Audit Opinions During the course of an audit of the financial statements of Glover Industries, a CPA is refused permission to inspect the minutes from the board of directors meetings. The CPA is instead offered a certified copy of all resolutions and actions involving accounting matters. REQUIRED: Which type of audit report would you suggest be issued this year and why?

(Essay)

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Question 30

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?

(Multiple Choice)

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Question 31

According to the AICPA principles, which of the following is incorrect?

(Multiple Choice)

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Question 32

Adverse opinions can only be issued by auditors based on which of the following?

(Multiple Choice)

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Question 33

If the auditor believes that there is a remote probability that resolution of an uncertainty will have a material effect on the financial statements, which of the following would the auditor issue?

(Multiple Choice)

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Question 34

A justified departure from GAAP may result in which of the following?

(Multiple Choice)

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Question 35

Violations of GAAP resulting in qualified opinions affect the standard audit report through which of the following?

(Multiple Choice)

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Question 36

When an auditor lacks independence with respect to a client, which of the following should the auditor issue?

(Multiple Choice)

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Question 37

If the auditor determines that management's annual report on internal controls is incomplete or not properly presented, the auditor's report will include an explanatory paragraph that describes the reasons for this determination.

(True/False)

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Question 38

When the auditor wishes to emphasize a matter in the financial statements, which of the following would the audit report contain?

(Multiple Choice)

4.9/5

(82)

Question 39

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?

(Multiple Choice)

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Question 40

Showing 21 - 40 of 109

The most difficult decisions about which opinion to issue are generally centered around decisions based on the materiality level and pervasiveness of GAAP violations, the significance of scope limitations, and the likelihood of the entity being a going concern.

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?

If the firm auditing a company realizes that it is not independent with respect to the client, it will issue disclaimer of opinion based on the inherent GAAP violation imposed by the audit firm.

Inconsistent application of accounting principles by the client is a GAAP violation and would result in a qualified audit report.

Disclaimers of opinion 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?

Which of the following is an example of circumstances that would not limit the audit scope?

Under international auditing standards, when the audit client has engaged other audit firms to audit remote locations around the country, the principal auditor must mention the other audit firms in the audit report.

When might an auditor modify the introductory paragraph and replace the scope paragraph with explanatory paragraph?

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?

According to the AICPA principles, which of the following is incorrect?

Adverse opinions can only be issued by auditors based on which of the following?

If the auditor believes that there is a remote probability that resolution of an uncertainty will have a material effect on the financial statements, which of the following would the auditor issue?

A justified departure from GAAP may result in which of the following?

Violations of GAAP resulting in qualified opinions affect the standard audit report through which of the following?

When an auditor lacks independence with respect to a client, which of the following should the auditor issue?

If the auditor determines that management's annual report on internal controls is incomplete or not properly presented, the auditor's report will include an explanatory paragraph that describes the reasons for this determination.

When the auditor wishes to emphasize a matter in the financial statements, which of the following would the audit report contain?

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?

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Auditing Debt Obligations and Stockholders Equity Transactions

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