Exam 18: Reports on Audited Financial Statements

When are an auditor's reporting responsibilities not met by attaching an explanation of the circumstances and a disclaimer of opinion to the entity's financial statement?

An auditor includes a separate paragraph in an otherwise unmodified report to emphasize that the entity being reported on had significant transactions with related parties. The inclusion of this separate paragraph

Which of the following would be considered a change that affects consistency?

If a public company issues financial statements that purport to present its financial position and results of operations but omits the statement of cash flows, the auditor ordinarily will express a(an)

In which of the following situations would an auditor ordinarily choose between expressing an "except for" qualified opinion and expressing an adverse opinion?

Which of the following would not require an explanatory/emphasis-of-matter paragraph in the auditor's report?

For each of the following situations, indicate what type of audit report is most appropriate. a. The auditor lacks independence in fact, but not necessarily in appearance. b. There is a scope limitation and it is material but the overall financial statements are still presented fairly. c. The uncorrected misstatements are immaterial. d. There is a departure from GAAP and it is pervasively material.

In the auditor's report, the principal auditor decides not to make reference to another CPA who audited an entity's subsidiary. The principal auditor could justify this decision if, among other requirements, the principal auditor

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

In the first audit of an entity, because of the entity's record retention policies, an auditor was not able to gather sufficient evidence about the consistent application of accounting principles between the current and the prior year, as well as the amounts of assets or liabilities at the beginning of the current year. If the amounts in question could materially affect current operating results, the auditor would

An auditor may be unable to express an unqualified opinion if an immaterial departure from GAAP is present in the financial statements.

The choice of which audit report to issue depends on the condition and the materiality of any departure.

A special report related to compliance with contractual provisions provides

When a question arises about an entity's continued existence, the auditor should consider factors tending to mitigate the significance of negative information concerning the entity's means for maintaining adequate cash flow. An example of such a factor is the

An auditor was unable to obtain audited financial statements or other evidence supporting an entity's investment in a large foreign subsidiary. Between which of the following reports should the auditor choose?

Which of the following conditions or events most likely would cause an auditor to have substantial doubt about an entity's ability to continue as a going concern?

When audited financial statements are presented in an entity's document containing other information, the auditor should

When an auditor expresses an adverse opinion, the opinion paragraph should include

If the auditor believes that there is minimal likelihood that resolution of an uncertainty will have a material effect on the financial statements, the auditor would issue a(n)

Which of the following parties is responsible for the fairness of the representations made in financial statements?