Exam 15: Audit Reports

When the auditor is unable to obtain sufficient,appropriate evidence concerning the beginning inventory,which is material,the report is modified by adding an explanatory paragraph prior to the opinion paragraph and appropriate modification to the auditor's responsibility paragraph.

The decision about whether to make reference to another auditor in the report on the audit of ICFR does not differ from the corresponding decision as it relates to the audit of the financial statements.

Violations of GAAP resulting in qualified opinions affect the audit report through which of the following?

In which one of the following instances would an auditor not issue a disclaimer of opinion?

When there is a restriction on the scope of the internal control over financial reporting (ICFR)engagement,what should the auditor do?

A client that has a departure from generally accepted accounting principles that is immaterial will receive a qualified or adverse opinion.

A client that treats a material lease transaction as an operating lease when it is in fact a capital lease has deviated from GAAP and will receive a qualified or adverse opinion.

An unqualified audit opinion with an explanatory paragraph often makes reference to the footnotes of the financial statements

Which of the following would not result in an unqualified audit report with an explanatory paragraph?

If an omission of an important audit procedure is discovered,the auditor should immediately issue a disclaimer of opinion for the audit.

The opinion paragraph of the audit report for Schnook Co.states that the financial statements "do not present fairly." Which type of audit opinion is this?

Which of the following requires that key audit matters (KAMs)be included in audit reports,effective for audits of financial statements for periods ending on or after December 15,2016?

There are no differences in audit report requirements across the standards of the AICPA,PCAOB,and IAASB.

Adverse opinions can only be issued by auditors based on which of the following?

Adverse opinions affect the audit report in which of the following ways?

The client will not allow Collier and Company,CPAs,to read the minutes of the board of director's meetings that occurred during the year under audit.Such a limitation will usually result in the auditor issuing a disclaimer.

For the past five years,Clark CPAs has audited the financial statements of a manufacturing company.During this period,the audit scope was limited by the client as to the observation of the annual physical inventory.Because Clark CPAs considers the inventories to be material and was not able to satisfy the audit requirements by using other auditing procedures,the firm was unable to express an unqualified opinion on the financial statements in each of the five years. The CPA was allowed to observe physical inventories for the current year ended December 31,20Y8,because the client's bank would no longer accept the audit reports.However,to minimize audit fees,the client requested that the CPA not extend audit procedures to the inventory as of the beginning of the year,January 1,20Y8. REQUIRED: Which type of audit report would you suggest be issued this year and why?

Aloe Products is an online retailer of lotions and other beauty supplies.The company records revenues at the time that the customer orders are placed on the website,rather than when goods are shipped.Goods are typically shipped two days after the order is placed.The auditor determines that the amount of orders placed but not shipped as of the balance sheet date is not material. REQUIRED: Which type of audit report would you suggest be issued and why?

The use of another CPA firm by an audit firm to perform part of the engagement on a client's subsidiary will require the audit firm to do which of the following?

In which of the following situations would the auditor modify the audit report on ICFR?