Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

11. Which of the following changes to PSAs and the auditor's report have been caused by enhanced auditor reporting on going concern (GC)? a. Explicit

11. Which of the following changes to PSAs and the auditor's report have been caused by enhanced auditor reporting on going concern (GC)?

a. Explicit description of the respective responsibilities of management and the auditor in all auditor's reports

b. Separate GC section required when material uncertainty exists, with a heading "Material Uncertainty Related to Going Concern"

c. Requirement to challenge adequacy of disclosures for GC "close calls"

d. All of the above

CORRECT ANSWERS ONLY TO BE LIKED.

12. The audit report issued by Lozano and Co., CPAs, included the following paragraph that followed the opinion paragraph:

Without qualifying our opinion we draw attention to Note 11 to the financial statements. The Company is the defendant in a lawsuit alleging infringement of certain patent rights . . .

This paragraph is considered:

a. an inappropriate reporting practice

b. an additional information to be a part of the notes to financial statements.

c. an emphasis of matter regarding uncertainty which is considered an acceptable reporting practice

d. inappropriate because it contradicted the unqualified opinion issued by the auditor

13. An explanatory paragraph may be added to the audit report while at the same time issuing an unqualified opinion in all cases except when:

a. the client has changed an accounting principle with the agreement of the auditor.

b. there is an immaterial departure from PFRS to ensure fair presentation with the agreement of the auditor.

c. the audit opinion is partly based on the work of another auditor

d. the audit work has been materially limited by management.

14. The auditor's inquiries of management regarding supplementary information on the effects of price level changes should be directed to the judgments made concerning

a. Relevance and validity.

b. Measurement and presentation.

c. Accuracy and objectivity.

d. Rights and obligations.

15. Unaudited financial statements for the prior year presented in comparative form with audited financial statements for the current year should be clearly marked to indicate their status and

I. The report on the prior period should be reissued to accompany the current period report.

II. The report on the current period should include as a separate paragraph a description of the responsibility assumed for the prior period's financial statements.

a. I only.

b. II only.

c. Both I and II.

d. Either I or II.

16. The predecessor auditor, who is satisfied after properly communicating with the successor auditor, has reissued a report because the audit client desires comparative financial statements. The predecessor auditor's report should make

a. Reference to the report of the successor auditor only in the scope paragraph.

b. Reference to the work of the successor auditor in the scope and opinion paragraphs.

c. Reference to both the work and the report of the successor auditor only in the opinion paragraph.

d. No reference to the report or the work of the successor auditor.

17. When single-year financial statements are presented, an auditor ordinarily would express an unqualified opinion in an unmodified report if the

a. Auditor is unable to obtain audited financial statements supporting the entity's investment in a foreign affiliate.

b. Entity declines to present a statement of cash flows with its balance sheet and related statements of income and retained earnings.

c. Auditor wishes to emphasize an accounting matter affecting the comparability of the financial statements with those of the prior year.

d. Prior year's financial statements were audited by another CPA whose report, which expressed an unqualified opinion, is not presented.

18. Before reissuing the prior year's auditor's report on the financial statements of a former client, the predecessor auditor should obtain a letter of representations from the

Former client's management Successor auditor

a. Yes Yes

b. Yes No

c. No Yes

d. No No

19. In May 20X9, an auditor reissues the auditor's report on the 20X7 financial statements at a continuing client's request. The 20X7 financial statements are not restated and the auditor does not revise the wording of the report. The auditor should

a. Dual date the reissued report.

b. Use the release date of the reissued report.

c. Use the original report date on the reissued report.

d. Use the current period auditor's report date on the reissued report.

20. When audited financial statements are presented in a client's document containing other information, the auditor should

a. Perform inquiry and analytical procedures to ascertain whether the other information is reasonable.

b. Add an explanatory paragraph to the auditor's report without changing the opinion on the financial statements.

c. Perform the appropriate substantive auditing procedures to corroborate the other information.

d. Read the other information to determine that it is consistent with the audited financial statements.

21. An auditor concludes that there is a material inconsistency in the other information in an annual report to shareholders containing audited financial statements. If the auditor concludes that the financial statements do not require revision, but the client refuses to revise or eliminate the material inconsistency, the auditor may

a. Revise the auditor's report to include a separate explanatory paragraph describing the material inconsistency.

b. Issue an "except for" qualified opinion after discussing the matter with the client's board of directors.

c. Consider the matter closed since the other information is not in the audited financial statements.

d. Disclaim an opinion on the financial statements after explaining the material inconsistency in a separate explanatory paragraph.

22. It exists when other information, not related to matters appearing in the audited financial statements, is incorrectly stated or presented.

a. Material inconsistency

b. Material misstatement of fact

c. Material weaknesses

d. Misstatement

23. With regard to how KAM was addressed in the audit, the description may include the following, except

a. Aspects of the auditor's response or approach and brief overview of procedures performed

b. Indication of the outcome of the auditor's procedures

c. Key observations with respect to the matter

d. None of the above

24. When comparative financial statements are presented, which refers to financial statements "taken as a whole," should be considered to apply to the financial statement of the

a. Periods presented plus one preceding period.

b. Current period only.

c. Current period and those of the other periods presented.

d. Current and immediately preceding period only.

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

a. Report is issued.

b. Auditor's fieldwork is completed.

c. Fiscal year ends.

d. Last subsequent event occurred.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Water Pollution Economics Aspects And Research Needs

Authors: Allen V Kneese

1st Edition

1317387554, 9781317387558

More Books

Students also viewed these Economics questions

Question

Find i0 in the circuit in Fig. 3.59. Figure 3.59 162 2i 4 A 0 2 4

Answered: 1 week ago

Question

What do you plan on doing upon receiving your graduate degree?

Answered: 1 week ago

Question

An improvement in the exchange of information in negotiations.

Answered: 1 week ago