Multiple Choice Questions
The following questions concern unqualified audit reports. Choose the best response.
a. Which of the following statements about a combined report on the financial statements and internal control over financial reporting is correct?
(1) The auditor's opinion on internal control is for the same period of time as the opinion on the financial statements.
(2) The report includes additional paragraphs for the definition and limitations of internal control.
(3) The introductory, scope, and opinion paragraphs are unchanged from a report for an audit of the financial statements only.
(4) GAAP is the framework used to evaluate internal control.
b. The date of the CPA's opinion on the financial statements of the client should be the date of the
(1) Closing of the client's books.
(2) Finalization of the terms of the audit engagement.
(3) Completion of all important audit procedures.
(4) Submission of the report to the client.
c. If a principal auditor decides to refer in his or her report to the audit of another auditor, he or she is required to disclose the
(1) Name of the other auditor.
(2) Nature of the inquiry into the other auditor's professional standing and extent of the review of the other auditor's work.
(3) Portion of the financial statements audited by the other auditor.
(4) Reasons for being unwilling to assume responsibility for the other auditor's work.