Auditing and Assurance Services, Student Value Edition (16th Edition)
16th Edition
ISBN: 9780134075754
Author: Alvin A. Arens, Randal J. Elder, Mark S. Beasley, Chris E. Hogan
Publisher: PEARSON
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Question
Chapter 3, Problem 21.2MCQ
To determine
Identify the option under which the auditor must issue a report if the financial statements are fairly stated but the auditor concludes there is substantial doubt whether the client can continue in existence
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2. A client has departed from GAAP for what you, the auditor, considers to be justifiable. The financial statementsÂ
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Type of Opinion:
When financial statements contain a departure from GAAP because, due to unusual circumstances, the statements would otherwise be misleading, the auditor should explain the unusual circumstances in a separate paragraph and express an opinion that is.......
Select one:
a. Adverse.
b. Qualified.
c. Qualified or adverse, depending on materiality. "
d. Unqualified.
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.
Chapter 3 Solutions
Auditing and Assurance Services, Student Value Edition (16th Edition)
Ch. 3 - Prob. 1RQCh. 3 - Prob. 2RQCh. 3 - Prob. 3RQCh. 3 - Prob. 4RQCh. 3 - Prob. 5RQCh. 3 - Prob. 6RQCh. 3 - Prob. 7RQCh. 3 - Prob. 8RQCh. 3 - Prob. 9RQCh. 3 - Prob. 10RQ
Ch. 3 - Prob. 11RQCh. 3 - Prob. 12RQCh. 3 - Prob. 13RQCh. 3 - Distinguish between a report qualified due to a...Ch. 3 - Prob. 15RQCh. 3 - Prob. 16RQCh. 3 - Prob. 17RQCh. 3 - Prob. 18RQCh. 3 - Prob. 19RQCh. 3 - Prob. 20.1MCQCh. 3 - Prob. 20.2MCQCh. 3 - Prob. 20.3MCQCh. 3 - Prob. 21.1MCQCh. 3 - Prob. 21.2MCQCh. 3 - Prob. 21.3MCQCh. 3 - Prob. 22.1MCQCh. 3 - Prob. 22.2MCQCh. 3 - Prob. 22.3MCQCh. 3 - Prob. 23DQPCh. 3 - Prob. 24DQPCh. 3 - Prob. 25DQPCh. 3 - Prob. 26DQPCh. 3 - Prob. 27DQPCh. 3 - Prob. 28DQPCh. 3 - Prob. 29DQP
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Similar questions
- If in the auditor’s judgment, management’s use of the going concern basis of accounting in the preparation of the financial statements is inappropriate: A. The auditor will give a disclaimed of opinion. B. The auditor shall express an adverse opinion. C. The auditor shall express an unmodified opinion with a separate section. D. The auditor shall express a qualified opinion.arrow_forwardwhen the auditor discover a misstatement in the financial statement and this misstatement is considered as material and will affect the overall financial statement fairness , the auditor will issue a : Select one: a. Qualified opinion b. Modified wording opinion c. unqualified with emphasis of matter d. Adverse opinionarrow_forwardWhat category of audit report will be issued if the auditor concludes that the financial statementsare not fairly presented?  A. qualified  B. adverse  C. standard unmodified opinion  D. disclaimerarrow_forward
- If the auditor concludes that financial statements are not free from material misstatements and the effect of material misstatements are not pervasive to the financial statements. Auditor shall express:  Disclaimer of opinionUnmodified opinionAdverse opinionQualified opinionarrow_forwardWhich of the following is not a condition before an auditor may add Emphasis of Matter paragraph in the auditor’s report?a. Matter is already fully disclosed in the financial statements.b. No material misstatement exists.c. Not result to modification of opinion.d. Be placed immediately after the opinion.arrow_forwardThe auditor shall express what kind of opinion when the auditor, having obtained sufficient appropriate audit evidence, concludes that misstatements, individually or in the aggregate, are both material and pervasive to the financial statements. A. Adverse B. Qualified C. Disclaimer D. None of the abovearrow_forward
- What is the appropriate nature of opinion when the auditor is unable to obtain sufficient appropriate audit evidence on which to base the opinion, but the auditor concludes that the possible effects on the financial statements of undetected misstatements, if any, could be material but not pervasive? a. Unmodified opinion. b. Disclaimer of opinion. c. Qualified opinion. d. Adverse opinion.arrow_forwards1: 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 Falsearrow_forwardSufficient and appropriate evidence is the focus of the third field work standard. * O True O False When the auditor concludes that there is substantial doubt about an entity's ability to continue as a going concern, the auditor should consider the possible effects on the financial statements and the related disclosures. O True Falsearrow_forward
- When financial statements are affected by a material departure from generally accepted accounting principles, the auditors should:   Withdraw from the engagement.   Issue an unmodified opinion with a basis for modification paragraph.   Issue an "except for" qualification or a disclaimer of opinion.   Issue an "except for" qualification or an adverse opinion.arrow_forwardWhich of the following situations will not result in modification of the auditor's report because of a scope limitation? * O Inadequacy in the accounting records. O Restriction imposed by the client. Inability to obtain sufficient appropriate evidential matter. Reliance placed on the report of another auditor.arrow_forwardNoncompliance includes transactions entered by the entity’s employees and management in their personal capacity. The preliminary judgment or estimate about materiality represents the maximum amount by which a set of financial statements could be misstated and still not cause the auditor to believe that the decisions of reasonable users would be affected. Group of answer choices False, True True, False True, True False, Falsearrow_forward
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