1.Which of the following reports are likely when management has not made available minutes to the board of directors meetings during the year? a)Neither adverse nor disclaimer. b)Adverse only. c)Both adverse and disclaimer. d)Disclaimer only. 2.Which of the following is least likely to be considered in determining whether a misstatement pervasively misstates the financial statement? a)An immaterial misstatement is similar to one that occurred in the prior year. b)A material misstatement represents a substantial proportion of the financial statements. c)A disclosure is fundamental to users’ understanding of the financial statements. d)A material misstatement is confined to specific elements, accounts, or items of the financial statements. 3.Due to complications related to a national health crisis, the auditors were unable to observe major portions of the client’s year-end inventory count. However, they believe that they have been able to perform adequate alternative procedures. If this is the only area of concern, the most likely audit report opinion is: a)Unqualified. b)Qualified. c)Adverse. d)Disclaimer 4.Which of the following is a discretionary inclusion in an audit report? a)Substantial doubt about the ability of a client to continue as a going concern. b)An unusually important significant event. c)A change in accounting principles from LIFO to FIFO. d)Reissued financial statements due to a material misstatement when originally issued. 5.In which of the following types of audit reports is a change in the estimated life of certain assets which the auditors consider appropriate and to have a material effect on income is most likely to result? a)Unmodified with an additional section added. b)Adverse. c)Disclaimer. d)Unqualified with no additional section added. 6.Additional information may be added to what remains a report with an unmodified (unqualified) opinion if it relates to: a)the audit only. b)neither the financial statement nor the audit. c)the financial statements and the audit. d)the financial statement only. 7.When a financial statement note appropriately discloses substantial doubt about the ability of a client to continue as a going concern it may result in which type(s) of opinion? a)Both unmodified and disclaimer. b)Disclaimer only. c)Neither unmodified nor disclaimer. d)Unmodified only.

1.Which of the following reports are likely when management has not made available minutes to the board of directors meetings during the year? a)Neither adverse nor disclaimer. b)Adverse only. c)Both adverse and disclaimer. d)Disclaimer only. 2.Which of the following is least likely to be considered in determining whether a misstatement pervasively misstates the financial statement? a)An immaterial misstatement is similar to one that occurred in the prior year. b)A material misstatement represents a substantial proportion of the financial statements. c)A disclosure is fundamental to users’ understanding of the financial statements. d)A material misstatement is confined to specific elements, accounts, or items of the financial statements. 3.Due to complications related to a national health crisis, the auditors were unable to observe major portions of the client’s year-end inventory count. However, they believe that they have been able to perform adequate alternative procedures. If this is the only area of concern, the most likely audit report opinion is: a)Unqualified. b)Qualified. c)Adverse. d)Disclaimer 4.Which of the following is a discretionary inclusion in an audit report? a)Substantial doubt about the ability of a client to continue as a going concern. b)An unusually important significant event. c)A change in accounting principles from LIFO to FIFO. d)Reissued financial statements due to a material misstatement when originally issued. 5.In which of the following types of audit reports is a change in the estimated life of certain assets which the auditors consider appropriate and to have a material effect on income is most likely to result? a)Unmodified with an additional section added. b)Adverse. c)Disclaimer. d)Unqualified with no additional section added. 6.Additional information may be added to what remains a report with an unmodified (unqualified) opinion if it relates to: a)the audit only. b)neither the financial statement nor the audit. c)the financial statements and the audit. d)the financial statement only. 7.When a financial statement note appropriately discloses substantial doubt about the ability of a client to continue as a going concern it may result in which type(s) of opinion? a)Both unmodified and disclaimer. b)Disclaimer only. c)Neither unmodified nor disclaimer. d)Unmodified only.

Auditing: A Risk Based-Approach to Conducting a Quality Audit

10th Edition

ISBN:9781305080577

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter17: Other Services Provided By Audit Firms

Section: Chapter Questions

Problem 20MCQ

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Related questions

Question

1.Which of the following reports are likely when management has not made available minutes to the board of directors meetings during the year?

a)Neither adverse nor disclaimer.

b)Adverse only.

c)Both adverse and disclaimer.

d)Disclaimer only.

2.Which of the following is least likely to be considered in determining whether a misstatement pervasively misstates the financial statement?

a)An immaterial misstatement is similar to one that occurred in the prior year.

b)A material misstatement represents a substantial proportion of the financial statements.

c)A disclosure is fundamental to users’ understanding of the financial statements.

d)A material misstatement is confined to specific elements, accounts, or items of the financial statements.

3.Due to complications related to a national health crisis, the auditors were unable to observe major portions of the client’s year-end inventory count. However, they believe that they have been able to perform adequate alternative procedures. If this is the only area of concern, the most likely audit report opinion is:

a)Unqualified.

b)Qualified.

c)Adverse.

d)Disclaimer

4.Which of the following is a discretionary inclusion in an audit report?

a)Substantial doubt about the ability of a client to continue as a going concern.

b)An unusually important significant event.

c)A change in accounting principles from LIFO to FIFO.

d)Reissued financial statements due to a material misstatement when originally issued.

5.In which of the following types of audit reports is a change in the estimated life of certain assets which the auditors consider appropriate and to have a material effect on income is most likely to result?

a)Unmodified with an additional section added.

b)Adverse.

c)Disclaimer.

d)Unqualified with no additional section added.

6.Additional information may be added to what remains a report with an unmodified (unqualified) opinion if it relates to:

a)the audit only.

b)neither the financial statement nor the audit.

c)the financial statements and the audit.

d)the financial statement only.

7.When a financial statement note appropriately discloses substantial doubt about the ability of a client to continue as a going concern it may result in which type(s) of opinion?

a)Both unmodified and disclaimer.

b)Disclaimer only.

c)Neither unmodified nor disclaimer.

d)Unmodified only.

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