Exam 12: Reports on Audited Financial Statements

If the auditors present a combined report on an entity's financial statements and internal control over financial reporting,in which paragraph of the report is the opinion on the entity's financial statements shown?

When the auditors lack independence,a(n)______________________________________ is issued on the fairness of the entity's financial statements.

When presenting reports on the entity's financial statements and internal control over financial reporting,the auditors can present separate reports or a(n)_____________________________ report.

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

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

Reference in a group auditors' report to the fact that part of the audit of group financial statements was performed by component auditors most likely would be an indication of

When the financial statements contain a departure from GAAP,the auditors must render an adverse opinion on the entity's financial statements.

When auditors issue a report on the current-year financial statements shown in comparative form,they should _____________________________ the report they previously issued on the prior-year financial statements.

Auditors would be more likely to issue a disclaimer of opinion when a scope limitation is client imposed as opposed to circumstance imposed.

In a standard report,which of the following paragraphs indicates that auditors conducted their audits in accordance with standards of the PCAOB?

Which of the following phrases would auditors most likely include in their report when expressing a qualified opinion on the entity's financial statements because of inadequate disclosure?

If group auditors choose to rely on the work of component auditors,the group auditors must refer to the component auditors in their report by name.

Auditors are not responsible for determining whether there is a substantial doubt about an entity's ability to continue as a going concern.

Auditors should disclose the substantive reasons for expressing an adverse opinion on the entity's financial statements in an additional paragraph

Why must auditors issue a report when they are associated with financial statements? What guidelines are provided for situations in which auditors lack independence with respect to the client?

Restrictions imposed by an entity prohibited the auditors' observation of physical inventories,which accounted for 35% of total assets.Alternative auditing procedures were not feasible,although the auditors were able to examine satisfactory evidence for all other items in the financial statements.The auditors would most likely express

The auditors' report on the entity's financial statements included an additional paragraph disclosing a difference of opinion between the auditors and the entity for which the auditors believed an adjustment to the financial statements should be made.The opinion paragraph of the auditors' report should express a(n)

"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 31,2012" is an illustration of a

Indicate the type of report on the entity's financial statements that would be required for each of the following circumstances.Assume any amount in question is material on an overall basis (but not pervasive)unless otherwise stated.

The auditors' report should be dated as of the date of the client's financial statements.