Home Mallings Review ch Sh 6. 9. Insert Page Layout References View * cut Calibrio - 7 AN AR .. 2! T et A - Copy BI U bexx' A.A: . Normal Format Painter No Spac... Heading 1 Heading 2 Title Subtitle Subtle Em. pboard Font Paragh Styles 5. If financial statements xublic company fail to disclose a material fact, the auditors may disclose the information in an additional paragraph added to the report and, depending upon materiality, Issue either a qualified opinion or adverse opinion on the statements. of financial statements contain a material departure from generally accepted accounting principles, the auditors usually should issue a disclaimer of opinion. 7. A change that the auditor agrees with from one generally accepted accounting principle to another generally accepted accounting principle that has a pervasive effect on net income usually results in an adverse opinion by the auditors. 8. When there is substantial doubt about a company's ability to remain a going concern, with the matter properly disclosed in the financial statements, the report issued is unmodified with an emphasis-of-matter paragraph or a disclaimer of opinion. A scope limitation will generally result in a disclaimer of opinion, regardless of whether sufficient appropriate audit evidence is gathered using alternative procedures. 10. Regulation sx governs the form and content of financial statements filed with the SEC. 11. Which of the following is not explicitly included in an audit report for a nonpublic company? A. A statement that the auditor believes that the audit provides a reasonable basis for expressing negative assurance. B. A statement that the auditor's responsibility is to express an opinion on the financial statements. C. A statement that the financial statements are the responsibility of management. D. A title with the word 'independent." 12. When an auditor of a nonpublic company 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 date the financial statements will be released (1/26/X2), the auditor's responsibility includes: Preparing prospective financial information to verify whether management's plans can be effectively implemented. Projecting conditions and events from one year prior to this year's date (12/31/XD) to 12/31/X1. C. Issuing an adverse or negative assurance opinion, depending upon materiality, due to the possible effects on the financial statements. 0 Considering the adequacy of disclosure about the entity's possible inability to continue as a going concern. 13. A basis for a modification paragraph in the audit of the financial statements of a nonpublic company is only included with qualified, adverse, or disclaimers of opinion is presented only in audit reports with unmodified opinions. C Has a section title: Emphasis-of-Matter. Must be included in all nonpublic company audit reports. B B S W hp