Exam 18: Reports on Audited Financial Statements

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)

Discuss the new IAASB reporting standards for "listed" (public)entities which are effective for financial periods ending after December 15,2016.

What are the four key audit report enhancements for all entities,which are effective for financial periods ending after December 15,2016?

In an engagement to express an opinion on one or more specified elements,accounts,or items of a financial statement,the auditor can generally audit only those specified elements and not the entire set of financial statements.However,the auditor is required to audit the entire set of financial statements if the elements specified include

Comparative financial statements include the financial statements of a prior period that were examined by a predecessor auditor whose report is not presented.If the predecessor auditor's report was qualified,the successor auditor must

When comparative financial statements are presented,the fourth standard of reporting,which refers to financial statements "taken as a whole," should be considered to apply to the financial statements of the

When an auditor reports on financial statements prepared on an entity's income tax basis,the auditor's report should

An opinion based in part on the report of another auditor requires an explanatory/emphasis-of-matter paragraph be added to the standard unqualified audit report.

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.If the entity's financial statements adequately disclose its financial difficulties,the auditor's report is required to include an explanatory/emphasis-of-matter paragraph that specifically uses the phrase(s)

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

An auditor concludes that there is a material inconsistency in the other information in an annual report to shareholders containing audited financial statements.If the auditor concludes that the financial statements do not require revision,but the entity refuses to revise or eliminate the material inconsistency,the auditor may

Changes in an entity's accounting choices either affect "consistency" in the application of GAAP or they do not.For each item listed below,state whether the item affects consistency and identify the effect the change will have on the audit report. 1.Change in accounting estimate. 2.Correction of an error in principle. 3.Change in reporting entity. 4.Correction of an error that does not involve an accounting principle. 5.Change in accounting principle. 6.Change in classification and reclassification.

A change in accounting estimate is an example of an accounting change that affects comparability and requires an explanatory/emphasis-of-matter paragraph in the audit report.

Which of the following situations will not result in modification of the auditor's report because of a scope limitation?

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

A CPA who is not independent and is associated with financial statements should disclaim an opinion with respect to those financial statements.The disclaimer should