Exam 17: Auditors Report

If financial statements fail to disclose a material fact, the auditors may disclose the information in an emphasis-of-matter paragraph and, depending upon materiality, issue either a qualified opinion or adverse opinion on the statements.

In which of the following circumstances will it be most likely that an adverse opinion is considered appropriate?

An auditor's report on comparative financial statements should be dated as of the date of the:

A client has changed the salvage values of a number of its fixed assets. The auditors believe that the revised salvage values are realistic. The appropriate report on the financial statements is:

William & Plaud are group auditors for the Lowell Corporation. One of the subsidiaries of Lowell Corporation, Wilson Manufacturing Co., is audited by Lyle & Adams. a. If William & Plaud make reference in their report to reliance on the report of the component auditors are they qualifying their opinion? Explain. b. Regardless of whether William & Plaud make reference to reliance on the report of the component auditors, they should perform certain procedures with respect to Lyle and Adams' audit. What are these procedures?

A client imposed scope limitation will generally result in a disclaimer of opinion, regardless of whether sufficient appropriate audit evidence is gathered using alternative procedures.

The unmodified standard audit report of a nonpublic company does not explicitly state that:

After performing all necessary procedures, the predecessor auditors reissue a prior-period report on financial statements at the request of the client without revising the original wording. The predecessor auditors should:

Audit reports should be dated as the date on which sufficient appropriate audit evidence has been collected.

Which of the following procedures most likely would assist an auditor in identifying conditions and events that may indicate substantial doubt about an entity's ability to continue as a going concern?

Regulation S-X governs the form and content of financial statements filed with the SEC.

Morgan, CPA, is the group auditor for a multinational corporation. Another CPA has examined and reported on the financial statements of a significant subsidiary of the corporation. Morgan is satisfied with the independence and professional reputation of the component auditor, as well as the quality of the component auditor's audit. With respect to Morgan's report on the consolidated financial statements, taken as a whole, Morgan:

Which of the following is not explicitly included in an audit report for a nonpublic company?

CPA Firm A has performed most of the audit of Consolidated Company's financial statements and qualifies as the group auditor. CPA Firm B did the remainder of the work. Firm A wishes to assume full responsibility for Firm B's work. Which of the following statements is correct?

Which of the following would most likely be an appropriate addressee for an audit report?

If the predecessor auditors do not reissue their audit report on comparative financial statements, the successor auditors should:

It is not appropriate for the auditors' report to refer a reader to a financial statement note for details regarding a(an):

When a client declines to disclose essential information in the financial statements or notes, the auditor of the financial statements should:

When an auditor has concluded there is substantial doubt about an entity's ability to continue as a going concern for a reasonable period of time beyond the current financial statement date (9/30/X1), the auditor's responsibility includes:

Which of the following is a "registration statement" that is filed with the SEC by a company planning to issue securities to the public?