Question 4Respond to each of the following independent situations involving auditor reports. For each·scenario (1)identify the reporting issue involved; (2) explain the type of opinion that should be-issued; (3)identify any requiredmodifications of the standard auditor'sreport.bThe audit client has engaged in a significant number of related party transactions duringthe year. The auditor-believes that disclosure of these transactions is essentialto:comply with GAAP, and that the transactions have a highly material and pervasiveeffect on the financial statem ents. However, the client has refusedto make the required-financial statement disclosures.4.4A client refusesto allowthe auditors to confirm the accounts receivable. The potential·effects of relatedmisstatements on the financial statements are highly material and-pervasive. The auditors are unable to satisfy themselvesregarding the receivable and-sales balances by using alternative auditing procedures.5.The auditor has completed the engagement and detected no material errors or fraudinthe financial statements. However, the auditor wishes to communicate to the financial·statement users what she considers to be the most significant issues that arose during:the audit.6.4飞tttt ↑

Audit reports are issued by auditors to express his opinion regarding the truthiness and fairness of…

Answered: situations involving auditor reports-

Business

Accounting

situations involving auditor reports-

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

Chapter4: Professional Liability, Auditor Judgment Frameworks, And Professional Responsibilities

Section: Chapter Questions

Problem 23MCQ

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11. The major purposes of obtaining a client representation letter include: Select one:a. To document in the audit working papers the client's responses to many questions asked by the auditors during the engagementb. All of the mentioned is correct c. To remind the client officers of their primary responsibility for the financial statementsd. To provide evidence in areas where accounting presentation may be dependent upon management's future intentions.
1. Which of the following is a principle underlying an audit conducted in accordance with generally accepted auditing standards? Select one:a. Auditors are responsible for, among other things, maintaining professional objectivism, exercising professional engagement, and obtaining appropriate documentation.b. The audit report expresses an opinion on whether the financial statements are free of material and immaterial misstatement.c. The audit provides reasonable assurance the client will remain in business for at least one year.d. An auditor's opinion enhances the degree of confidence that intended users can place in the financial statements.
15 Which section of the audit report contains the important matters communicated to and addressed by the auditor based on his professional judgments during the course of audit? a. Key audit matters b. Opinion section c. Going concern d. Basis of opinion
QUESTION 1 1) To obtain reasonable assurance about whether the financial statements as a whole are free frommaterial misstatement, the auditor must fulfill several performance responsibilities, including A) obtaining sufficient, appropriate audit evidence. .B) exercising professional judgment .C) verifying that all audit work is performed by a CPA with a minimum of three years'experience. D) providing an opinion on the financial statements 4 points QUESTION 2 2) When assessing the risk of material misstatements in the financial statements, A. company management is responsible for determining materiality levels. B. the auditor must understand the client's business and industry. C. GAAS specifies in detail how much and what types of evidence the auditor needs to obtain. D. inadequate internal control procedures will mitigate client business risk 4 points QUESTION 3 In order…
Under which of the conditions below the auditor will make “an emphasis of matter” to the financial statements in the audit report even though an unqualified opinion is given: i) The existence of significant related party transactions. ii) Report involving other auditors iii)Important events occurring subsequent to the balance sheet date. iv) Matters affecting the comparability of the financial statements with those of the preceding year A. i) iii) and iv) B. ii) iii) and iv) C. i) ii) iii) and iv) D. ii) and iii)
Question 11 Under GAAS an auditor opinion must explicitly state the following: GAAP has been consistently applied to the financial statements presented. Audit evidence obtained is sufficient and appropriate and provide a basis for our audit opinion. The company audited is not a going going concern. All of the answers provided are explicitly stated in the audit opinion.
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asap F Identify the primary audit objectives that auditors hope to accomplish by confirming a client's year-end accounts receivable. Explain the difference between "positive" and "negative" confirmation requests and discuss the quality of audit evidence yielded by each.
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13. When auditing an entity's financial statements in accordance with Government Auditing Standards (the "Yellow Book"), an auditor is required to report on: I. Recommendations for actions to improve operations. II. The scope of the auditor's tests of compliance with laws and regulations. Group of answer choices I only. II only. Both I and II. Neither I nor II.