I. Modified True False - There are 20 statements below. If they are "true", write the full word "true" in the space provided. If the statement is "false", you must change the statement, so that it becomes "true". Only half credit will be given, if you do not correct the false statement. (20 questions, 2 points each, 40 points total). 1. An auditor's report on compliance with contractual or regulatory requirements must be prepared by a different CPA firm than the one preparing the audit of the financial statements. _2. An accountant's compilation report prohibits the use of single financial statements. 3. An accountant's compilation report is less comprehensive than a review. 4. An accountant must always maintain independence even when preparing financial statements for a company where she is employed. 5. Assurance services include expressing an unqualified auditor's opinion about a company's financial statements. 6. An audit examination does not require an auditor's opinion. _7. Trust services provided by an auditor refers to estate and financial planning functions. _8. In assessing internal control over notes receivable, if the file containing the notes is administered in the Cashier's Office. This is an example of good segregation of duties. _9. The McKesson & Robbins case affirmed the auditor's need for observation of the physical inventories. 10. Unadjusted COGS includes net amounts for over- or under-applied overhead. _11. A new auditor should never accept beginning inventory balances. 12. In contrast to the audit of plant assets, current assets have a greater significance to net income, and the year-end cut-off