The auditor’s report contains the following: “We did not audit the financial statementsof EZ, Inc., a wholly owned subsidiary, which statements reflect total assets and revenuesconstituting 27 percent and 29 percent, respectively, of the consolidated totals. Thosestatements were audited by other auditors whose report has been furnished to us, andour opinion, insofar as it relates to the amounts included for EZ, Inc., is based solely onthe report of the other auditors.” These sentences(1) indicate a division of responsibility.(2) assume responsibility for the other auditor.(3) require a departure from an unqualified opinion.(4) are an improper form of reporting.
The auditor’s report contains the following: “We did not audit the financial statementsof EZ, Inc., a wholly owned subsidiary, which statements reflect total assets and revenuesconstituting 27 percent and 29 percent, respectively, of the consolidated totals. Thosestatements were audited by other auditors whose report has been furnished to us, andour opinion, insofar as it relates to the amounts included for EZ, Inc., is based solely onthe report of the other auditors.” These sentences(1) indicate a division of responsibility.(2) assume responsibility for the other auditor.(3) require a departure from an unqualified opinion.(4) are an improper form of reporting.
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
Chapter16: Advanced Topics Concerning Complex Auditing Judgments
Section: Chapter Questions
Problem 39RSCQ
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Question
The auditor’s report contains the following: “We did not audit the financial statements
of EZ, Inc., a wholly owned subsidiary, which statements reflect total assets and revenues
constituting 27 percent and 29 percent, respectively, of the consolidated totals. Those
statements were audited by other auditors whose report has been furnished to us, and
our opinion, insofar as it relates to the amounts included for EZ, Inc., is based solely on
the report of the other auditors.” These sentences
(1) indicate a division of responsibility.
(2) assume responsibility for the other auditor.
(3) require a departure from an unqualified opinion.
(4) are an improper form of reporting.
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