Question 1

The emphasis-of-matter paragraph is _______.

Accepted Answer

A) placed after the opinion paragraph in the standard unmodified report. 
B) placed before the opinion paragraph in the standard unmodified report. 
C) placed with the opinion paragraph in the standard unmodified report. 
D) referred to in a separate report 
A) placed after the opinion paragraph in the standard unmodified report. 
B) placed before the opinion paragraph in the standard unmodified report. 
C) placed with the opinion paragraph in the standard unmodified report. 
D) referred to in a separate report

Question 2

AU-C 560 and AS 2905 state the first step when responding to subsequently discovered facts is to_______.

Accepted Answer

A) discuss the matter with the appropriate level of management and, if appropriate, those charged with governance 
B) discuss the matter with the appropriate level of management rather than those charged with governance 
C) issue a disclaimer of opinion, to avoid liability 
D) immediately notify the board of directors, and request the internal audit function investigate accordingly 
A) discuss the matter with the appropriate level of management and, if appropriate, those charged with governance 
B) discuss the matter with the appropriate level of management rather than those charged with governance 
C) issue a disclaimer of opinion, to avoid liability 
D) immediately notify the board of directors, and request the internal audit function investigate accordingly

Question 3

AR-C 80, Compilation Engagements _______.

Accepted Answer

A) provides guidance on materiality thresholds 
B) assists the auditor with respect to fee arrangements 
C) provides guidance for the performance of a compilation engagement 
D) provides guidance for the performance of an audit engagement 
A) provides guidance on materiality thresholds 
B) assists the auditor with respect to fee arrangements 
C) provides guidance for the performance of a compilation engagement 
D) provides guidance for the performance of an audit engagement

Question 4

When the auditor cannot complete some portion of the planned audit procedures, this is referred to as _______.

Accepted Answer

The answer of When the auditor cannot complete some portion...

Question 5

When reference is made to a component auditor, _______.

Accepted Answer

A) the auditor's responsibility paragraph is modified to indicate the portion of the group financial statements that were audited by the component auditor 
B) the auditor's responsibility paragraph is removed, and reference is made to the group financial statements that were audited by the component auditor 
C) liability for the fairness of the financial statements is transferred accordingly 
D) inherent risk will decrease accordingly 
A) the auditor's responsibility paragraph is modified to indicate the portion of the group financial statements that were audited by the component auditor 
B) the auditor's responsibility paragraph is removed, and reference is made to the group financial statements that were audited by the component auditor 
C) liability for the fairness of the financial statements is transferred accordingly 
D) inherent risk will decrease accordingly

Question 6

A component auditor is typically_______.

Accepted Answer

A) another audit partner in the same office 
B) a different partner at a different office of the same firm 
C) a different accounting firm that audits a component or subsidiary of the parent company 
D) a different accounting firm that audits a component of the subsidiary company 
A) another audit partner in the same office 
B) a different partner at a different office of the same firm 
C) a different accounting firm that audits a component or subsidiary of the parent company 
D) a different accounting firm that audits a component of the subsidiary company

Question 7

If the auditor's opinion on the revised financial statements is different from the previously issued audit report, then a/an _______ should be added to the revised audit report.

Accepted Answer

A) emphasis-of-matter paragraph 
B) going concern paragraph 
C) auditor's responsibility paragraph 
D) opinion paragraph 
A) emphasis-of-matter paragraph 
B) going concern paragraph 
C) auditor's responsibility paragraph 
D) opinion paragraph

Question 8

With respect to management's disclosure required for going concern issues, _______.

Accepted Answer

A) if management determines that the disclosure is fairly presented in accordance with the applicable financial reporting framework, then an unmodified auditor's report can still be issued 
B) if auditors determine that the disclosure is fairly presented in accordance with the applicable financial reporting framework, then an unmodified auditor's report can still be issued 
C) the auditor should advise management that they are now unable to issue an unmodified audit opinion 
D) the auditor should advise management that they are now unable to issue a modified audit opinion 
A) if management determines that the disclosure is fairly presented in accordance with the applicable financial reporting framework, then an unmodified auditor's report can still be issued 
B) if auditors determine that the disclosure is fairly presented in accordance with the applicable financial reporting framework, then an unmodified auditor's report can still be issued 
C) the auditor should advise management that they are now unable to issue an unmodified audit opinion 
D) the auditor should advise management that they are now unable to issue a modified audit opinion

Question 9

Companies typically present their financial statements in comparative form, which means showing ______.

Accepted Answer

A) three consecutive years of balance sheets and four consecutive years of the income statement, statement of cash flows, and statement of stockholders' equity 
B) two consecutive years of balance sheets and two consecutive years of the income statement, statement of cash flows, and statement of stockholders' equity 
C) the last fiscal year's balance sheet income statement, statement of cash flows, and statement of stockholders' equity 
D) two consecutive years of balance sheets and three consecutive years of the income statement, statement of cash flows, and statement of stockholders' equity. 
A) three consecutive years of balance sheets and four consecutive years of the income statement, statement of cash flows, and statement of stockholders' equity 
B) two consecutive years of balance sheets and two consecutive years of the income statement, statement of cash flows, and statement of stockholders' equity 
C) the last fiscal year's balance sheet income statement, statement of cash flows, and statement of stockholders' equity 
D) two consecutive years of balance sheets and three consecutive years of the income statement, statement of cash flows, and statement of stockholders' equity.

Question 10

Which of the following is NOT a component of unmodified opinion for a private company audit?

Accepted Answer

A) Auditor tenure 
B) Title 
C) Opinion paragraph 
D) Introductory paragraph 
A) Auditor tenure 
B) Title 
C) Opinion paragraph 
D) Introductory paragraph

Question 11

Auditors must use their professional judgment _______.

Accepted Answer

A) to distinguish if a misstatement or scope limitation is just material or pervasively material 
B) to distinguish if a misstatement or scope limitation is just immaterial or pervasively material 
C) to determine if the firm has the ability to pay the auditor for services rendered 
D) in selecting the client's audit committee 
A) to distinguish if a misstatement or scope limitation is just material or pervasively material 
B) to distinguish if a misstatement or scope limitation is just immaterial or pervasively material 
C) to determine if the firm has the ability to pay the auditor for services rendered 
D) in selecting the client's audit committee

Question 12

The portion of the consolidated financial statements audited by the component auditor _______.

Accepted Answer

A) is expressed in dollar amounts only 
B) must be expressed in terms of percentages of total assets only 
C) can be expressed in dollar amounts or percentages of total assets, total revenues, or other appropriate criteria 
D) should not be relied on to the same extent as the group auditor 
A) is expressed in dollar amounts only 
B) must be expressed in terms of percentages of total assets only 
C) can be expressed in dollar amounts or percentages of total assets, total revenues, or other appropriate criteria 
D) should not be relied on to the same extent as the group auditor

Question 13

Engagement of a component auditor requires an emphasis-of-a-matter paragraph?

Accepted Answer

A) True 
 B)False

Question 14

Material misstatements discovered during the audit _______.

Accepted Answer

A) are a basis for the auditor to immediately issue a scope limitation 
B) are discussed with the client's legal counsel only, and usually they make the recommended adjustment to correct the misstatement 
C) are discussed with management, and usually management makes the recommended adjustment to correct the misstatement 
D) require a note disclosure in the financial statements 
A) are a basis for the auditor to immediately issue a scope limitation 
B) are discussed with the client's legal counsel only, and usually they make the recommended adjustment to correct the misstatement 
C) are discussed with management, and usually management makes the recommended adjustment to correct the misstatement 
D) require a note disclosure in the financial statements

Question 15

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements.

Accepted Answer

A) True 
 B)False

Question 16

If a change in accounting principle has a material effect on the comparability of the financial statements, then AU-C 708 requires auditors to add an_______ paragraph to the auditor's report.

Accepted Answer

The answer of If a change in accounting principle has...

Question 17

A/an _______ is presented by the auditor to indicate that the financial statements are in accordance with the applicable financial reporting framework.

Accepted Answer

A) unmodified opinion 
B) modified opinion 
C) unqualified opinion 
D) audit opinion 
A) unmodified opinion 
B) modified opinion 
C) unqualified opinion 
D) audit opinion

Question 18

Companies typically present their financial statements _______.

Accepted Answer

A) to show the most recent year only 
B) in comparative form, which means showing two consecutive years of balance sheets and three consecutive years of the income statement, statement of cash flows, and statement of stockholders' equity 
C) in standard form, which means showing three consecutive years of balance sheets and three consecutive years of the income statement, statement of cash flows, and statement of stockholders' equity 
D) only to those entities who have expressed an interest in scrutinizing them 
A) to show the most recent year only 
B) in comparative form, which means showing two consecutive years of balance sheets and three consecutive years of the income statement, statement of cash flows, and statement of stockholders' equity 
C) in standard form, which means showing three consecutive years of balance sheets and three consecutive years of the income statement, statement of cash flows, and statement of stockholders' equity 
D) only to those entities who have expressed an interest in scrutinizing them

The emphasis-of-matter paragraph is _______.

AU-C 560 and AS 2905 state the first step when responding to subsequently discovered facts is to_______.

AR-C 80, Compilation Engagements _______.

When the auditor cannot complete some portion of the planned audit procedures, this is referred to as _______.

When reference is made to a component auditor, _______.

A component auditor is typically_______.

If the auditor's opinion on the revised financial statements is different from the previously issued audit report, then a/an _______ should be added to the revised audit report.

With respect to management's disclosure required for going concern issues, _______.

Companies typically present their financial statements in comparative form, which means showing ______.

Which of the following is NOT a component of unmodified opinion for a private company audit?

Auditors must use their professional judgment _______.

The portion of the consolidated financial statements audited by the component auditor _______.

Engagement of a component auditor requires an emphasis-of-a-matter paragraph?

Material misstatements discovered during the audit _______.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements.

If a change in accounting principle has a material effect on the comparability of the financial statements, then AU-C 708 requires auditors to add an_______ paragraph to the auditor's report.

A/an _______ is presented by the auditor to indicate that the financial statements are in accordance with the applicable financial reporting framework.

Companies typically present their financial statements _______.

Introduction and Overview of Audit and Assurance

Professionalism, Ethics and Legal Liability

Risk Assessment Part Iaudit Risk and Audit Strategy

Risk Assessment Part Iiunderstanding the Client

Audit Evidence

Understanding of the Clients System of Internal Controls

Data Analyticsoverview and Application

Risk Responseperforming Tests of Controls

Risk Responseperforming Substantive Procedures

Risk Responseaudit Sampling for Substantive Testing

Auditing the Revenue Cycle

Auditing the Purchases Cycle and Payroll Cycle

Auditing Cash, Inventory, Investing and Financing Activities

Completing the Audit

Filters

Exam 15: Reporting on the Audit

The emphasis-of-matter paragraph is _______.

AU-C 560 and AS 2905 state the first step when responding to subsequently discovered facts is to_______.

AR-C 80, Compilation Engagements _______.

When the auditor cannot complete some portion of the planned audit procedures, this is referred to as _______.

When reference is made to a component auditor, _______.

A component auditor is typically_______.

If the auditor's opinion on the revised financial statements is different from the previously issued audit report, then a/an _______ should be added to the revised audit report.

With respect to management's disclosure required for going concern issues, _______.

Companies typically present their financial statements in comparative form, which means showing ______.

Which of the following is NOT a component of unmodified opinion for a private company audit?

Auditors must use their professional judgment _______.

The portion of the consolidated financial statements audited by the component auditor _______.

Engagement of a component auditor requires an emphasis-of-a-matter paragraph?

Material misstatements discovered during the audit _______.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements.

If a change in accounting principle has a material effect on the comparability of the financial statements, then AU-C 708 requires auditors to add an_______ paragraph to the auditor's report.

A/an _______ is presented by the auditor to indicate that the financial statements are in accordance with the applicable financial reporting framework.

Companies typically present their financial statements _______.

Introduction and Overview of Audit and Assurance

Professionalism, Ethics and Legal Liability

Risk Assessment Part Iaudit Risk and Audit Strategy

Risk Assessment Part Iiunderstanding the Client

Audit Evidence

Understanding of the Clients System of Internal Controls

Data Analyticsoverview and Application

Risk Responseperforming Tests of Controls

Risk Responseperforming Substantive Procedures

Risk Responseaudit Sampling for Substantive Testing

Auditing the Revenue Cycle

Auditing the Purchases Cycle and Payroll Cycle

Auditing Cash, Inventory, Investing and Financing Activities

Completing the Audit

Filters