Listen What audit report "opinion" would the auditor provide in the following situation? (2 marks)

You were engaged to examine Apollo Inc.s financial statements after the close of the corporations fiscal year. Because you were not engaged until after the balance sheet date, you were not able to physically observe the inventory count, which is a very material amount on the balance sheet. On the completion of your audit, you are satisfied that Apollos financial statements are presented fairly, including inventory about which you were able to satisfy yourself by the use of alternative audit procedures.

Question 34 options:

Unqualified - Other Matters Paragraph

Adverse

Qualified -Scope Restriction

Unqualified

Question 35 (2 points)

Listen What audit report "opinion" would the auditor provide in the following situation?

At the end of your audit of Quality Products Ltd., you conclude that the financial statements are presented fairly in all material respects. Only one item already mentioned in the notes to the financial statements keeps surfacing in your mind about the companys future, a hacker had broken into the companys sensitive network and it appears that payroll, accounting and inventory information has been stolen. Although there are no immediate damages to the company or its operations, you remain uncertain about the future effects of this theft of information and conclude that this is truly a very important event that the readers need to be aware of. (2 marks)

Question 35 options:

Unqualified - Emphasis of Matters Paragraph

Qualified - GAAP Departure

Unqualified - Other Matters Paragraph

Adverse

Question 36 (2 points)

Listen What audit report "opinion" would the auditor provide in the following situations? (2 marks)

You are ready to complete the audit of Reply Supplies Ltd. and provide your audit report but management refuses to change its valuation of inventory to the lower of cost or net realizable value, which would materially lower its value on the balance sheet. Managements reasoning is that the value of the inventory items that are currently recorded below net realizable value and causing the material change to the inventory value will soon rebound to the higher price as soon as the demand picks up again in the next few months. You cannot gather enough information on the demand to determine one way or the other.

Question 36 options:

Qualified - GAAP Departure

Qualified - Scope Restriction

Disclaimer of Opinion

Unqualified

Question 37 (2 points)

Listen What audit report "opinion" would the auditor provide in the following situation? (2 marks)

At the conclusion of your audit you, PA, review your schedule of all the unadjusted misstatements discovered and conclude that the financial statements are materially and pervasively affected. In fact the small profit currently showing on the unadjusted income statement will turn into a substantial loss once the adjustments are made.

Question 37 options:

Unqualified - Emphasis of Matter

Qualified - Scope Restriction

Qualified - GAAP Departure

Adverse

Question 38 (1 point)

Listen Which specific balance-related audit objective for physical inventory observation is being tested in the following audit procedures? (1 mark)

Inventory as recorded on tags exists.

Question 38 options:

Completeness

Valuation

Allocation

Existence

Question 39 (1 point)

Listen Which specific balance-related audit objective for physical inventory observation is being tested in the following audit procedures? (1 mark)

Existing inventory is counted and tagged, and tags are accounted for to make sure none is missing.

Question 39 options:

Rights & Obligations

Valuation

Allocation

Completeness

Question 40 (1 point)

Listen Which specific balance-related audit objective for physical inventory observation is being tested in the following audit procedures? (1 mark)

Inventory is recorded at the lower of cost or NRV (LCM).

Question 40 options:

Rights & Obligations

Valuation

Accuracy

Occurrence