Question 1

Both the auditor and the client work to avoid a report reservation.

Accepted Answer

A) True 
 B)False  True

Question 2

"The company has not made an allowance for bad debts for an account deemed uncollectible in the amount of $250,000 as of the year ended December 31,2013." is an example of a ________.

Accepted Answer

A) GAAP change requiring a qualified opinion 
B) scope limitation 
C) departure from GAAP 
D) report with a disclaimer of opinion 
A) GAAP change requiring a qualified opinion 
B) scope limitation 
C) departure from GAAP 
D) report with a disclaimer of opinion C

Question 3

A holding company has decided to carry its wholly owned subsidiary companies on the balance sheet using the equity method.The type of audit report required is ________.

Accepted Answer

A) unqualified 
B) qualified 
C) adverse 
D) disclaimer 
A) unqualified 
B) qualified 
C) adverse 
D) disclaimer C

Question 4

CA has been engaged to audit the financial statements of Marchano Ltd. ,a manufacturer of toys.Several individuals are suing the company because of a toy that injured children.The company has not disclosed the lawsuit in its financial statements.What type of audit report should be issued?

Accepted Answer

A) Adverse. 
B) A GAAP qualification. 
C) A scope qualification. 
D) Disclaimer or denial 
A) Adverse. 
B) A GAAP qualification. 
C) A scope qualification. 
D) Disclaimer or denial

Question 5

Restrictions imposed by a client prohibited the observation of physical inventories that account for 35% of total assets.Alternative audit procedures for inventory were not feasible,although the auditor was able to obtain satisfactory evidence for all other items in the financial statements.The auditor should express ________.

Accepted Answer

A) an "except for" qualified opinion referring to a departure from generally accepted accounting principles 
B) a disclaimer of opinion 
C) an unqualified opinion with a separate explanatory paragraph 
D) an unqualified opinion with an explanation in the scope paragraph 
A) an "except for" qualified opinion referring to a departure from generally accepted accounting principles 
B) a disclaimer of opinion 
C) an unqualified opinion with a separate explanatory paragraph 
D) an unqualified opinion with an explanation in the scope paragraph

Question 6

What are the public accountant's responsibilities when he or she is associated with the financial information of a company?

Accepted Answer

i.The accountant must comply with the ap

Question 7

Which level of assurance requires a PA to gather the most evidence?

Accepted Answer

A) Audit. 
B) Review. 
C) Examination. 
D) Compilation. 
A) Audit. 
B) Review. 
C) Examination. 
D) Compilation.

Question 8

An auditor most likely would issue a disclaimer of opinion because of ________.

Accepted Answer

A) inadequate disclosure of material information 
B) the omission of the statement of cash flows 
C) a material departure from generally accepted accounting principles 
D) management's refusal to furnish written representations 
A) inadequate disclosure of material information 
B) the omission of the statement of cash flows 
C) a material departure from generally accepted accounting principles 
D) management's refusal to furnish written representations

Question 9

Levels of assurance refer to ________.

Accepted Answer

A) the nature of the work performed and the conclusions auditors can render about financial statements 
B) generally accepted auditing standards 
C) qualifications,modifications,and expansions 
D) changes in the language of the audit report 
A) the nature of the work performed and the conclusions auditors can render about financial statements 
B) generally accepted auditing standards 
C) qualifications,modifications,and expansions 
D) changes in the language of the audit report

Question 10

When independence is lacking,an audit in accordance with generally accepted accounting standards is still possible.

Accepted Answer

A) True 
 B)False

Question 11

An accountant becomes associated with financial statements when he or she signs them as the Chief Financial Officer.

Accepted Answer

A) True 
 B)False

Question 12

An auditor decided to issue a qualified opinion on an entity's financial statements because a major inadequacy in its computerized accounting records prevented the auditor from applying necessary procedures.The opinion paragraph of the auditor's report should state that the qualification pertains to ________.

Accepted Answer

A) a GAAP departure 
B) a departure from generally accepted auditing standards 
C) the possible effect of the lack of audit evidence on the financial statements 
D) inadequate disclosure of necessary information 
A) a GAAP departure 
B) a departure from generally accepted auditing standards 
C) the possible effect of the lack of audit evidence on the financial statements 
D) inadequate disclosure of necessary information

Question 13

A scope limitation imposed by a client would result in an adverse opinion.

Accepted Answer

A) True 
 B)False

Question 14

An organization undergoing significant going concern problems presents several challenges for the PA to consider.Discuss some of these.

Accepted Answer

Dealing with questions of going concern

Question 15

In which of the following circumstances is a public accountant considered associated with a company's financial information?

Accepted Answer

A) The PA is a former employee of the company and prepared the statements. 
B) Financial statements are reproduced on the PA's letterhead. 
C) The PA is engaged by the company's auditors to do limited procedures in a remote location. 
D) The PA is married to the company's Chief Financial Officer. 
A) The PA is a former employee of the company and prepared the statements. 
B) Financial statements are reproduced on the PA's letterhead. 
C) The PA is engaged by the company's auditors to do limited procedures in a remote location. 
D) The PA is married to the company's Chief Financial Officer.

Question 16

In which of the following circumstances may the auditor issue the standard unqualified,unmodified audit report?

Accepted Answer

A) The client disclosed a change in accounting principles with an immaterial effect on financial position and results of operations. 
B) The financial statements do not disclose significant going concern issues. 
C) The financial statements do not disclose a justified departure from generally accepted accounting principles. 
D) The auditor has not been able to audit a substantial portion of the balance sheet because of circumstances beyond anyone's control. 
A) The client disclosed a change in accounting principles with an immaterial effect on financial position and results of operations. 
B) The financial statements do not disclose significant going concern issues. 
C) The financial statements do not disclose a justified departure from generally accepted accounting principles. 
D) The auditor has not been able to audit a substantial portion of the balance sheet because of circumstances beyond anyone's control.

Question 17

If financial statements contain a very material departure from GAAP such that the financial statements are virtually useless,the auditor can render a(an)________.

Accepted Answer

A) qualified "except for" opinion with reference to the departure 
B) adverse opinion with scope limitation reference 
C) adverse opinion with reference to the departure 
D) disclaimer of opinion 
A) qualified "except for" opinion with reference to the departure 
B) adverse opinion with scope limitation reference 
C) adverse opinion with reference to the departure 
D) disclaimer of opinion

Question 18

A disclaimer of opinion generally indicates ________.

Accepted Answer

A) the auditor is very uncertain with respect to an item and cannot form an opinion on the fairness of presentation of the financial statements as a whole 
B) because of a lack of evidence,the auditor is uncertain with respect to an isolated item that is material but not so material that the auditor cannot form an opinion on the fairness of presentation of the financial statements as a whole 
C) the auditor has observed a departure from generally accepted accounting principles that has a material effect upon the fairness of presentation of financial statements but the departure is not material enough to justify a qualified opinion 
D) the auditor has observed a departure from generally accepted accounting principles that is so material that a qualified opinion is not justified 
A) the auditor is very uncertain with respect to an item and cannot form an opinion on the fairness of presentation of the financial statements as a whole 
B) because of a lack of evidence,the auditor is uncertain with respect to an isolated item that is material but not so material that the auditor cannot form an opinion on the fairness of presentation of the financial statements as a whole 
C) the auditor has observed a departure from generally accepted accounting principles that has a material effect upon the fairness of presentation of financial statements but the departure is not material enough to justify a qualified opinion 
D) the auditor has observed a departure from generally accepted accounting principles that is so material that a qualified opinion is not justified

Question 19

What is the best description of the basis on which an auditor issues his or her report on financial statements?

Accepted Answer

A) Reporting standards. 
B) Sufficiency and appropriateness of evidence. 
C) Application of GAAP. 
D) Integrity of management. 
A) Reporting standards. 
B) Sufficiency and appropriateness of evidence. 
C) Application of GAAP. 
D) Integrity of management.

Question 20

When a client will not permit inquiry of outside legal counsel,the audit report will ordinarily contain a(n)________.

Accepted Answer

A) disclaimer of opinion 
B) "except for" qualified opinion regarding a departure from generally accepted accounting principles 
C) unqualified opinion with a separate explanatory paragraph 
D) adverse opinion 
A) disclaimer of opinion 
B) "except for" qualified opinion regarding a departure from generally accepted accounting principles 
C) unqualified opinion with a separate explanatory paragraph 
D) adverse opinion

Both the auditor and the client work to avoid a report reservation.

"The company has not made an allowance for bad debts for an account deemed uncollectible in the amount of $250,000 as of the year ended December 31,2013." is an example of a ________.

A holding company has decided to carry its wholly owned subsidiary companies on the balance sheet using the equity method.The type of audit report required is ________.

CA has been engaged to audit the financial statements of Marchano Ltd. ,a manufacturer of toys.Several individuals are suing the company because of a toy that injured children.The company has not disclosed the lawsuit in its financial statements.What type of audit report should be issued?

What are the public accountant's responsibilities when he or she is associated with the financial information of a company?

Which level of assurance requires a PA to gather the most evidence?

An auditor most likely would issue a disclaimer of opinion because of ________.

Levels of assurance refer to ________.

When independence is lacking,an audit in accordance with generally accepted accounting standards is still possible.

An accountant becomes associated with financial statements when he or she signs them as the Chief Financial Officer.

A scope limitation imposed by a client would result in an adverse opinion.

An organization undergoing significant going concern problems presents several challenges for the PA to consider.Discuss some of these.

In which of the following circumstances is a public accountant considered associated with a company's financial information?

In which of the following circumstances may the auditor issue the standard unqualified,unmodified audit report?

If financial statements contain a very material departure from GAAP such that the financial statements are virtually useless,the auditor can render a(an)________.

A disclaimer of opinion generally indicates ________.

What is the best description of the basis on which an auditor issues his or her report on financial statements?

When a client will not permit inquiry of outside legal counsel,the audit report will ordinarily contain a(n)________.

Introduction to Auditing

Auditors Professional Roles and Responsibilities

Auditors Ethical and Legal Responsibilities

Preliminary Audit Planning: Understanding the Auditees Business

Assessing Risks in an Audit Engagement

Internal Control Over Financial Reporting

Audit Evidence and Assurance

Control Assessment and Testing

Audit Sampling

The Revenues, Receivables, and Receipts Process and Cash Account Balance

The Purchases, Payables, and Payments Process

Payroll and Production Processes

The Finance and Investment Process

hapter 15 Completing the Audit Work

Applying Professional Judgment to Form the Audit Opinion and Issue the Audit Report

Other Public Accounting Services and Reportsreviews and Compilations

Professional Rules of Conduct Details and Auditor Responsibilities

The Audit of Accounting Estimates: Basic Material Relating to Accounting Estimates

Legal Liability Cases

Other Professional Accounting Services and Reports, Including Fraud Auditing

Filters

Exam 4: Reports on Audited Financial Statements

Both the auditor and the client work to avoid a report reservation.

"The company has not made an allowance for bad debts for an account deemed uncollectible in the amount of $250,000 as of the year ended December 31,2013." is an example of a ________.

A holding company has decided to carry its wholly owned subsidiary companies on the balance sheet using the equity method.The type of audit report required is ________.

CA has been engaged to audit the financial statements of Marchano Ltd. ,a manufacturer of toys.Several individuals are suing the company because of a toy that injured children.The company has not disclosed the lawsuit in its financial statements.What type of audit report should be issued?

What are the public accountant's responsibilities when he or she is associated with the financial information of a company?

Which level of assurance requires a PA to gather the most evidence?

An auditor most likely would issue a disclaimer of opinion because of ________.

Levels of assurance refer to ________.

When independence is lacking,an audit in accordance with generally accepted accounting standards is still possible.

An accountant becomes associated with financial statements when he or she signs them as the Chief Financial Officer.

A scope limitation imposed by a client would result in an adverse opinion.

An organization undergoing significant going concern problems presents several challenges for the PA to consider.Discuss some of these.

In which of the following circumstances is a public accountant considered associated with a company's financial information?

In which of the following circumstances may the auditor issue the standard unqualified,unmodified audit report?

If financial statements contain a very material departure from GAAP such that the financial statements are virtually useless,the auditor can render a(an)________.

A disclaimer of opinion generally indicates ________.

What is the best description of the basis on which an auditor issues his or her report on financial statements?

When a client will not permit inquiry of outside legal counsel,the audit report will ordinarily contain a(n)________.

Introduction to Auditing

Auditors Professional Roles and Responsibilities

Auditors Ethical and Legal Responsibilities

Preliminary Audit Planning: Understanding the Auditees Business

Assessing Risks in an Audit Engagement

Internal Control Over Financial Reporting

Audit Evidence and Assurance

Control Assessment and Testing

Audit Sampling

The Revenues, Receivables, and Receipts Process and Cash Account Balance

The Purchases, Payables, and Payments Process

Payroll and Production Processes

The Finance and Investment Process

hapter 15 Completing the Audit Work

Applying Professional Judgment to Form the Audit Opinion and Issue the Audit Report

Other Public Accounting Services and Reportsreviews and Compilations

Professional Rules of Conduct Details and Auditor Responsibilities

The Audit of Accounting Estimates: Basic Material Relating to Accounting Estimates

Legal Liability Cases

Other Professional Accounting Services and Reports, Including Fraud Auditing

Filters