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In which of the following situations would an auditor ordinarily issue an unqualified or unmodified financial statement audit opinion with no explanatory (or emphasis-of-matter or other-matter) paragraph?
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The client’s financial statements contain no material misstatements and the auditor concurs that this change is justified. If the change is disclosed in the notes to the financial statements, the auditor should issue a report with a(n):
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Audit Exam 1 ch 3

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In which of the following situations would an auditor ordinarily issue an unqualified or unmodified financial statement audit opinion with no explanatory (or emphasis-of-matter or other-matter) paragraph? The auditor decides not to refer to the report of another auditor as a basis, in part, for the auditor’s opinion.
The client’s financial statements contain no material misstatements and the auditor concurs that this change is justified. If the change is disclosed in the notes to the financial statements, the auditor should issue a report with a(n): unqualified opinion.
An auditor includes a separate paragraph in an otherwise unqualified financial statement audit report to emphasize that the entity being reported upon had significant transactions with related parties. The inclusion of this separate paragraph: is appropriate and would not negate the unqualified opinion.
Eagle had a computer failure and lost part of its financial data. auditor was unable to obtain sufficient audit evidence relating to Eagle’s inventory account. the inventory account is at least material, the auditor would most likely choose either: a qualified opinion or a disclaimer of opinion.
Tech appropriately disclosed an uncertainty due to pending litigation. the auditor was unable to satisfy herself that all pending lit had been identified. The auditor’s decision to issue a qualified opinion on Tech’s fs would most likely result from: a lack of sufficient evidence.
In which of the following circumstances would an auditor usually choose between issuing a qualified opinion or a disclaimer of opinion on a client’s financial statements? inability of the auditor to obtain sufficient appropriate evidence
King neither observed the inventory count nor confirmed receivables by direct communication with debtors but was satisfied that both were fairly stated after applying appropriate alternative procedures. King’s fs audit report most likely contained unmodified opinion.
com fs for a public company include the prior year’s fs, which were audited by a predecessor auditor. The predecessor’s report is not presented along with the com fs. If the predecessor’s report was unqualified, the successor should: indicate in the auditor’s report that the predecessor auditor expressed an unqualified opinion.
When reporting on comparative financial statements, which of the following circumstances should ordinarily cause the auditor to change the previously issued opinion on the prior year’s financial statements A departure from generally accepted accounting principles caused an adverse opinion on the prior year’s financial statements, and those prior year statements have been properly restated.
Which of the following best describes the auditor’s responsibility for “other information” included in the annual report to stockholders that contains financial statements and the auditor’s report? The auditor has no obligation to corroborate the “other information” but should read the “other information” to determine whether it is materially consistent with the financial statements.
When reporting on financial statements prepared on the basis of accounting used for income tax purposes, the auditor should include in the report a paragraph that: states that the income tax basis of accounting is a basis of accounting other than generally accepted accounting principles.
When an auditor is asked to express an opinion on an entity’s rent and royalty revenues, he or she may: accept the engagement, provided the auditor’s opinion is expressed in a special report that clearly states that only these specific accounts were audited.
Which of the following parties is responsible for the fairness of the representations made in financial statements? entity's management
Which of the following situations will not result in modification of the auditor's report because of a scope limitation? reliance placed on the report of another auditor
If the auditor wishes to call attention to the matter and management does not make an accrual in the financial statements, the auditor should issue a(an): unqualified report with an emphasis paragraph.
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): unqualified opinion.
A predecessor auditor should complete the following before reissuing a report on statements presented on a comparative basis: read the financial statements of the current period, compare prior-period financial statements with the current-year financial statements, and obtain letters of representation from the management of the entity and from the current-year, successor auditor.
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: is appropriate and would not negate the unqualified opinion.
When the entity fails to include information that is nec for the fp of fs in the body of the statem or in the related footnotes, it is the respon of the auditor to present the nature and impact of the faulty acct or misstate in the auditor's report and qualified opinion or an adverse opinion.
When the auditor is unable to determine the amounts associated with the illegal acts of entity personnel because of an inability to obtain adequate evidence, the auditor should issue a(n): disclaimer of opinion.
Created by: 20kohelmck
 

 



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