Exam 12: Reports on Audited Financial Statements

Green,CPA,was engaged to audit the financial statements of Essex Co.after its fiscal year had ended.The timing of Green's appointment and the start of field work made confirmation of accounts receivable by direct communication with the customers not feasible.However,Green applied other procedures and was satisfied as to the reasonableness of the account balances.Green's auditors' report most likely contained a(n)

An auditor concludes that there is substantial doubt about an entity's ability to continue as a going concern for a reasonable period of time.The entity's financial statements adequately disclose its financial difficulties.Under these circumstances,the auditor's report is required to include an emphasis-of-matter paragraph that specifically uses the following phrase(s).

When disclaiming an opinion due to a client-imposed scope limitation,auditors should describe the nature of the scope limitation in an additional paragraph and modify the

Auditors are required to reference consistency in their report when there are changes in

Charlie Company's comparative financial statements include the financial statements of the prior year that were audited by predecessor auditors whose report on those financial statements is not presented.If the predecessor's report was qualified,the successor auditors should

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

Situations in which auditors provide additional copies of a previous issued report or grant entities permission to use a previously issued report in a document containing financial statements after its original date are known as

Independent auditors must consider whether the entity has the ability to continue as a going concern.If a substantial doubt exists but disclosure is adequate and no other basis exists for modifying the report,the auditors would normally

When reporting on financial statements that include only summarized totals of account balances,the auditors' conclusion should state whether the information in the summary financial statements

Auditors who are reporting on financial statements that contain a material departure from generally accepted accounting principles should include an additional paragraph and

Carson,LLP audited Best Corporation's financial statements for the year ended December 31,Year 1.On February 15,Year 3,Carson gave Best permission to reissue the report previously issued on and dated March 1,Year 2.When is the cutoff date for Carson's responsibility on the reissued report?

Which of the following statements is not included in the Auditor's Responsibility section of the standard (unmodified)report?

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?

Which of the following guidelines should be followed when a disclaimer of opinion is issued?

When other information is presented in a document with audited financial statements,the auditors' report should

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

Holmes & Smith LLP were engaged to audit the financial statements of Sodolak Reality for the year ended December 31.During the engagement,Sodolak filed a lawsuit against Holmes & Smith LLP.What effect,if any,will this lawsuit have on the auditors' report?

When component auditors are involved in the audit of group financial statements,the group auditors are required to

When auditors qualify their opinion on the entity's financial statements because of inadequate disclosure,the auditors should describe the nature of the omission in an additional paragraph and modify

What is the auditors' responsibility for reporting on other information accompanying financial statements?