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The following seven situations are related to possible audit reports and some of the paragraphs that are written in those types of reports. Unless otherwise
The following seven situations are related to possible audit reports and some of the paragraphs that are written in those types of reports. Unless otherwise instructed, assume that the amounts involved are substantial material and that the customers are private corporations. The client deviated from GAAP The deviation is considered substantial material and comprehensive pervasive Client inventory records are deficient, so the auditor has to reach conclusions about the reasonableness of the inventory figure in the financial statements by using alternative methods. Once the necessary tests have been completed, the auditor is satisfied that he or she has sufficient evidence to support that amount. During the audit, the auditor obtains enough information that leads him to conclude that the continuity going concern of the company he is auditing is doubtful. The main audit firm group auditor decides not to assume responsibility for the audit work carried out by another firm component auditor which audited one of the subsidiaries owned by the parent company owned subsidiary The total assets and total income of the subsidiary represent and respectively, of the total assets and debts of the parent company audited by the main firm. In turn, the other firm the secondary one issued an unmodified opinion on the subsidiary's financial statements. A company under audit changes from the FIFO inventory cost flow method FIFO to a different and not generally accepted method nonGAAP Of course, the auditors do not agree with this change. The change severely affects all financial statements issued for that period. The client retained many of the accounting records during the audit process so that, by not making them available to the auditors, the auditors were unable to obtain sufficient competent evidence to be able to reach conclusions about the reasonableness of the account Equipment, the which has a substantial balance. The client changed its estimate of doubtful accounts from to of credit sales for the year. The auditors understand that the change is reasonable. Required Use the table provided and the following legends to say the type of report that should be issued in each case, the type of paragraphs or explanatory language that should be used, as well as a brief explanation of why you think this way. Types of opinion A Adverse N Denial disclaimer C Qualified U Not modified Type of paragraphs that are issued use the acronyms Types of modifications or explanations ENF Add a paragraph to emphasize a point explanatory language BO Add the paragraph that explains the basis for the modification. OTHER Make another type of explanatory language that requires altering more than one paragraph. NMC No modifications or changes to the explanatory language apply for example, in the case of the standard normal report
The following seven situations are related to possible audit reports and some of the paragraphs that are written in those types of reports. Unless otherwise instructed, assume that the amounts involved are substantial material and that the customers are private corporations.
The client deviated from GAAP The deviation is considered substantial material and comprehensive pervasive
Client inventory records are deficient, so the auditor has to reach conclusions about the reasonableness of the inventory figure in the financial statements by using alternative methods. Once the necessary tests have been completed, the auditor is satisfied that he or she has sufficient evidence to support that amount.
During the audit, the auditor obtains enough information that leads him to conclude that the continuity going concern of the company he is auditing is doubtful.
The main audit firm group auditor decides not to assume responsibility for the audit work carried out by another firm component auditor which audited one of the subsidiaries owned by the parent company owned subsidiary The total assets and total income of the subsidiary represent and respectively, of the total assets and debts of the parent company audited by the main firm. In turn, the other firm the secondary one issued an unmodified opinion on the subsidiary's financial statements.
A company under audit changes from the FIFO inventory cost flow method FIFO to a different and not generally accepted method nonGAAP Of course, the auditors do not agree with this change. The change severely affects all financial statements issued for that period.
The client retained many of the accounting records during the audit process so that, by not making them available to the auditors, the auditors were unable to obtain sufficient competent evidence to be able to reach conclusions about the reasonableness of the account Equipment, the which has a substantial balance.
The client changed its estimate of doubtful accounts from to of credit sales for the year. The auditors understand that the change is reasonable.
Required
Use the table provided and the following legends to say the type of report that should be issued in each case, the type of paragraphs or explanatory language that should be used, as well as a brief explanation of why you think this way.
Types of opinion
A Adverse N Denial disclaimer C Qualified U Not modified
Type of paragraphs that are issued use the acronyms
Types of modifications or explanations
ENF
Add a paragraph to emphasize a point explanatory language
BO
Add the paragraph that explains the basis for the modification.
OTHER
Make another type of explanatory language that requires altering more than one paragraph.
NMC
No modifications or changes to the explanatory language apply for example, in the case of the standard normal report
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