Exam 17: Auditors Reports

Which of the following is least likely to be included in a public company audit report with an unqualified opinion?

An independent auditor has concluded that substantial doubt remains about a nonpublic client's ability to continue as a going concern,but the client's financial statements have properly disclosed all of its solvency problems.The auditor would probably issue a(an):

An audit report on a public company is least likely to include a paragraph titled:

Which of the following is correct concerning a public company audit report with a disclaimer of opinion?

Ray,an independent auditor,was engaged to perform an audit of the financial statements of Zena Incorporated one month after its fiscal year had ended.Although the inventory count was not observed by Ray,the auditors were able to obtain sufficient appropriate audit evidence by applying alternative auditing procedures.Rays audit report will probably contain:

The term "except for" in an audit report is:

The first section of a public company audit report is the:

The auditors include an emphasis-of-matter paragraph in a nonpublic company audit report with an unmodified opinion in order to emphasize that the entity being reported upon is a subsidiary of another business enterprise.The inclusion of this paragraph:

Audit reports should be dated as the date on which sufficient appropriate audit evidence has been collected.

Which of the following is least likely to result in a qualification of the auditors' opinion due to a scope limitation?

Which of the following circumstances generally results in the issuance of a report that includes an opinion that is modified?

When an adverse opinion is expressed on the financial statements of a nonpublic company,the opinion paragraph should include a direct reference to:

Of the following,a public company audit report is most likely to be addressed to the:

Which of the following procedures most likely would assist an auditor in identifying conditions and events that may indicate substantial doubt about an entity's ability to continue as a going concern?

A scope restriction is least likely to result in a(an):

Use the accompanying solution sheet to reply to the eight situations below that relate to the audit of financial statements of nonpublic companies.Unless indicated otherwise,assume that material amounts are involved.Do not consider including an emphasis-of-matter paragraph in an "auditor discretionary" circumstance. Situations: 1.A company has departed from GAAP. 2.A company's inventory records were deficient and the auditor was required to satisfy herself that the inventory was properly stated using alternative procedures.She is satisfied that she has sufficient appropriate evidence. 3.In auditing a client,an auditor has determined that substantial doubt exists about an entity's ability to continue as a going concern. 4.A group auditor decides not to take responsibility for the work of the component auditor who audited a 70% owned subsidiary and issued an unmodified opinion.The total assets and revenues of the subsidiary are 5% and 8%,respectively,of the total assets and revenues of the entity being audited. 5.A company changes from FIFO to LIFO for inventory valuation and the auditor concurs with the change.The change has a material effect on the comparability of the entity's financial statements this year,but is expected to have an immaterial effect in the future. 6.Inadequate record retention policies by the client have resulted in a situation in which a CPA is unable to obtain sufficient appropriate audit evidence with respect to a material account. 7.A CPA has decided to emphasize in the audit report that the company she audited is a component of XYZ Company,its parent. 8.A client has changed its estimate of likely doubtful accounts from 2% of credit sales to 3%.The auditor believes the change to be reasonable. Reply as to the type of opinion and other modification to the audit report as follows: A. $\quad$ Adverse D. $\quad$ Disclaimer Q. $\quad$ Qualified U. $\quad$ Unmodified $\quad$ $\quad$ $\quad$ $\quad$ Other Modificatior EOM $\quad$ Add an emphasis-of-rratter parapraph. OM $\quad$ Add an other-rratter paragraph. BFM $\quad$ Add a basis for modification paragraph. OTHER $\quad$ Make modifications other than adding arn additional paragraph. NONE $\quad$ Make no modifications If more than one type of opinion is appropriate list each-one with "Report 1" and one with "Report 2." If only "Report 1" is appropriate,place an X in the "Report 2" Opinion Type cell,which indicates no second type of report is appropriate. Situation Opinion Type Other Modification 1 Report 1 Report 2 2 Report 1 Report 2 3 Report 1 Report 2 4 Report 1 Report 2 5 Report 1 Report 2 6 Report 1 Report 2 7 Report 1 Report 2 8 Report 1 Report 2

Which of the following modifications of the auditors' report does not include an additional paragraph?

Which of the following is not a difference between the audit report of a nonpublic and public company?

Which of the following is not included in PCAOB Form AP?

An auditor's report on comparative financial statements should be dated as of the date of the: