asarju for Sem III 202 General / BAAC4203 Auditing and Control-2 FINAL EXAM If the auditor concludes that financial statements are not free from material misstatements and the effect of materia misstatements are not pervasive to the financial statements. Auditor shall express: Qualified opinion Adverse opinion Disclaimer of opinion Unmodified opinion

asarju for Sem III 202 General / BAAC4203 Auditing and Control-2 FINAL EXAM If the auditor concludes that financial statements are not free from material misstatements and the effect of materia misstatements are not pervasive to the financial statements. Auditor shall express: Qualified opinion Adverse opinion Disclaimer of opinion Unmodified opinion

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

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

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

Chapter15: Audit Reports For Financial Statement Audits

Section: Chapter Questions

Problem 3CYBK

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s1: When client-imposed restrictions significantly limit the scope of the audit, the auditor generally should disclaim an opinion. s2: The auditor shall express modified opinion when the auditor concludes that the financial statements are prepared, in all material respects, in accordance with the applicable financial reporting framework. O S1 is True, S2 is False O S1 is False, S2 is True O Both statements are True O Both statements are False
Under which clause of ISA, the auditor's responsibilities relating to prevention and detection of errors and frauds in audit of financial statements are considered only secondary? a. ISA 240 (Redrafted) paragraph 10 b. ISA 250 (Redrafted) paragraph 4 c. ISA 250 (Redrafted) paragraph 10 d. ISA 240 (Redrafted) paragraph 4
Question 2 If the auditors encounter a significant scope limitation in evaluating a public company's internal control over financial reporting, which of the following types of opinions on the effectiveness of the comapny's internal control would be appropriate?: Unqualified Qualified disclaimer Adverse
1. Determine what report (unqualified, qualified, adverse, or disclaimer) is appropriate a. Evidence gathered and analyzed during the audit supports the client's assertions that the financial statements are fairly stated in accordance with GAAP. b. Management of a privately held company refuses to include the cash flow statement in the financial statements. The other financial statements, taken as a whole are fairly stated. Group of answers: Qualified Opinion with Except for paragraph Disclaimer - independence explanation Unmodified Unqualified Opinion Disclaimer - scope limitation explanation Adverse Opinion Qualified Opinion with explanatory paragraph Unqualified Opinion with additional explanatory paragraph Unqualified Opinion with except for paragraph
When the financial statements are fairly stated but the auditor concludes there is substantial doubt whether the client can continue in existence, the auditor should issue a(n)(1) adverse opinion.(2) qualified opinion only.(3) unqualified opinion.(4) unqualified opinion with explanatory paragraph.
When the auditor identifies that a key control absent he/she would most probably: Select one: a. Examine 100% of the population O b. Consider any existing compensating controls c. Conclude that a material weakness or significant deficiency exists. O d. Issue a qualified or disclaimer of opinion on internal controls over financial reporting
4 The Audit Report contains the auditor's opinion on the entity’s true and fair view presented in their financial reports. In the light of the statement identify the type of auditor’s opinion “when the whole financial reports are true and fair except for few areas.” a. Qualified opinion b. None of the options c. Unqualified opinion d. Negative opinion
b) Which of the following statements regarding additional information that is included in a document containing audited financial statements is not true? Group of answer choices 1: Additional information can be subject to certain limited procedures by the auditor. 2: Additional information can be the subject of another information opinion. 3: Additional information can be the subject of an in-relation-to opinion. 4: Additional information can be subject to a limited review by the auditor.
M5 Under the foreseeability standard, an accountant is liable even if he or she had no knowledge of the intended user of the audited financial statements. t/f
Question 1Not yet answeredMarked out of 1.00Flag questionQuestion textIn the audit of financial statements, an adverse report is issued when the CPA believes: a.the financial statements would be found to be materially misstated if an investigation were performed. b.some parts of the financial statements are materially misstated or misleading. c.the auditor is not independent. d.the overall financial statements are so materially misstated that they do not present fairly the financial position or results of operations and cash flows in conformity with GAAP/IFRS
S1: Modified opinion is a qualified opinion, an adverse opinion or a disclaimer of opinion on the financial statements. S2: When the auditor considers it necessary to express an adverse opinion or disclaim an opinion on the financial statements as a whole, the auditor's report shall not also include an unmodified opinion with respect to the same financial reporting framework on a single financial statement or one or more specific elements, accounts or items of a financial statement. S3: When the auditor modifies the opinion on the financial statements, the auditor shall include a paragraph in the auditor's report immediately before the opinion paragraph that provides a description of the matter giving rise to the modification. a. All statements are true b. All statements are false c. S1 and S2 are true
28) Which of the following statements are not true about auditors responsibilities? a) The financial statements are auditors responsibility b) The auditor's responsibility for the audited financial statements is confined to the expression of his or her opinion on them c) To identify and assess the risks of material mis-statement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain sufficient appropriate audit evidence to provide a basis for the auditor’s opinion d) To obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances and for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. All a) , b) , c) and d) Only a) and c) Only a) and d) Only a)