UUES I IUN 30 An auditor has not been given access to the minutes of the board of directors' meetings held during the year. As a result, the auditor would most likely issue which opinions? A Adverse opinion A Qualied (GAAP) opinion A Unqualified opinion with an emphasis of matter paragraph A Denial of opinion QUESTION 31 Which of the following opinions is an auditor most likely to issue when he or she found a material misstatement in a client's opening balances during an initial audit engagement, but has determined that the balance sheet accounts at the end of the fiscal year are not materially misstated? A An unqualied opinion modified by an explanatory paragraph A A qualified (GAAP) opinion A A qualified (scope) opinion A An adverse opinion QUESTION 29 What type of audit opinion should the auditor issue if, after a first audit of a new client, the auditor has been unable to obtain sufficient appropriate evidence concerning the carrying value of the opening inventories which were material in amount but not highly so? The auditor has no other concerns about the financial statements. An unqualified opinion on the financial statements including a note that no opinion is expressed with respect to the O comparative figures for the previous year as they were not audited O An audit report that is qualified with respect to the comparative figures A denial of opinion on the current year's income statement, statement of retained earnings, and statement of cash flows, and an unqualified opinion with respect to the balance sheet A qualification of opinion on the current year's income statements, statement of retained earnings, and statement of cash O flows, and an unqualified opinion with respect to the balance sheetQUESTION 28 What type of information would most likely be found in an auditor's logistical plan? O Arrangements made with the client in respect of space, equipment, and access to records O Issues of overall assurance, materiality, and basic timing Choice of internal control questionnaires and audit programs O Actual staffing for the engagement and audit feesQUESTION 27 How is the critical cut-off percentage rule used in the planning stage of an audit? a It allows the auditor to identify items that exceed materiality. It allows the auditor to identify items that may not exceed materiality, but for which the percentage change is so large that it indicates (j potential problems. a It helps the auditor to identify items that may be recorded after the audit period. m It is used by the auditor to determine the amount of performance materiality as a percentage of overall materiality. QUESTION 26 Ifthe auditor determines that the risk of material misstatement (RMM) is high, then which of the following would be appropriate? A Assigning more experienced personnel to the audit A Doing more of the substantive testing at an interim date, instead of waiting until the end of the year A Increasing the amount considered to be material A Relying more on the client's internal controls QUESTION 24 Which of the following is true concerning materiality and misstatements found during the audit? The auditor would communicate all misstatements (other than those classied as trivial) accumulated during the audit with the appropriate (T; level of management, and request management to correct those misstatements. The auditor would communicate only misstatements that exceed materiality to the appropriate level of management, and request (T; management to correct those misstatements. The auditor would communicate all misstatements accumulated during the audit with the appropriate level of management, and request (T; management to correct those misstatements which management feels are material. The auditor would communicate all misstatements accumulated during the audit with the appropriate level of management, and request (T; management to correct those misstatements considered to be material by the auditor. QUESTION 22 Which of the following is true regarding the auditor's responsibilities concerning the client's compliance with laws and regulations? a The auditor shall obtain a general understanding of the legal and regulatory framework applicable to the client. The auditor's only required audit procedures are to contact both the client and the client's lawyer to request written representations that it "W has complied with all laws and regulations. The auditor has no required audit procedures because non-compliance may involve conduct designed to conceal it, such as collusion or (T forgery, which the auditor is not trained to detect. The auditor has no responsibility to detect non-compliance with laws and regulations, since whether an act constitutes noncompliance is A ultimately a matter for legal determination by a court of law. QUESTION 21 Which of the following confirmation requests would provide audit evidence considered to be most reliable? An external confirmation request that asks the confirming party to reply to the auditor in all cases, indicating the confirming party's O agreement with the given information. An external confirmation request that asks the confirming party to reply to the auditor only if the party disagrees with the recorded O amount. An external confirmation request that does not contain the amount to be confirmed, and asks the confirming party to fill in the amount and O reply to the auditor. O An external confirmation request that asks the confirming party to reply to the client.QUESTION 19 Senate Products Ltd. is in its second year of business and has not recorded any liability for its goods sold last year, even though it offers a two- year warranty. Which of the following management assertions would be affected? O Classification O Compliance O Existence O Completeness QUESTION 20 Which of the following is false concerning the use of observation as an evidence-gathering technique by auditors? O Observation is limited to the point in time at which the observation takes place. O Observation is limited by the fact that the act of being observed may affect how the process or procedure is performed. O Observation of a fixed asset provides evidence of ownership. O Observation of a fixed asset provides evidence of existence.QUESTION 17 Which of the following is true concerning the auditor's responsibilities according to Canadian Auditing Standards (GAS)? A Inventory must be counted on the last day of the auditee's scal period unless it is not feasible to do so. A Inventory owned by the auditee but located at a third party's location must be inspected by the auditor m If inventory is material to the nancial statements, the auditor must observe the year-end physical inventory count unless it is not feasible to do so. A The auditor must design the inventory-counting procedures to be used by the auditee. QUESTION 18 How should the current period audit report be worded when the prior period nancial statements were not audited? A The auditor shall state in another matter paragraph in the auditor's report that the corresponding gures are unaudited. A The auditor shall state in another matter paragraph that no assurance is given regarding the opening balances. A No comment is necessary in the report, unless the opening balances contain material misstatements. A No comment is necessary in the report, unless the opening balances are material. QUESTION 11 An audit report included an additional paragraph disclosing a difference of opinion between the auditor and the client. The auditor believed that an adjustment should be made to the financial statements. The opinion paragraph of the audit report should express O An unqualified opinion. An "except for" opinion citing a departure from generally accepted accounting principles. O An "except for" opinion citing a scope limitation. O A disclaimer of opinion. QUESTION 12 Which audit opinion is most appropriate if the auditor of a client for the past seven years identifies that while there has been no change to the client's operations or controls (which were assessed during the previous audit as operating effectively), the client is unable to provide a paper trail to support transactions on the financial statements? O Unqualified opinion O Qualified opinion O Disclaimer of opinion O Adverse opinion