Question 1

In which of the following circumstances may the auditor issue the standard unqualified, unmodified audit report?

Accepted Answer

A) The client disclosed a change in accounting principles with an immaterial effect on financial position and results of operations. 
B) The financial statements do not disclose significant going concern issues. 
C) The financial statements do not disclose a justified departure from generally accepted accounting principles. 
D) The auditor has not been able to audit a substantial portion of the balance sheet because of circumstances beyond anyone's control. 
A) The client disclosed a change in accounting principles with an immaterial effect on financial position and results of operations. 
B) The financial statements do not disclose significant going concern issues. 
C) The financial statements do not disclose a justified departure from generally accepted accounting principles. 
D) The auditor has not been able to audit a substantial portion of the balance sheet because of circumstances beyond anyone's control.

Question 2

Management has decided that the life of a piece of heavy equipment should be decreased from 15 years to 10 years thus increasing the annual amortization.The auditor agrees that this amortization period is more reflective of the nature of the asset.The type of audit report that should be issued is:

Accepted Answer

A) Unqualified. 
B) Qualified. 
C) Adverse. 
D) Disclaimer. 
A) Unqualified. 
B) Qualified. 
C) Adverse. 
D) Disclaimer.

Question 3

An independent auditor must consider whether the auditee has the ability to continue as a going concern.If a substantial doubt exists but disclosure is adequate and no other basis exists for modifying the report, under CICA section 5510, the auditor should

Accepted Answer

A) Disclaim an opinion. 
B) Express an adverse opinion. 
C) Qualify the opinion. 
D) Express an unqualified opinion. 
A) Disclaim an opinion. 
B) Express an adverse opinion. 
C) Qualify the opinion. 
D) Express an unqualified opinion.

Question 4

Which of the following auditing procedures most likely would assist an auditor in identifying conditions and events that may indicate substantial doubt about an entity's ability to continue as a going concern?

Accepted Answer

A) Inspecting title documents to verify whether any assets are pledged as collateral. 
B) Confirming with third parties the details of arrangements to maintain financial support. 
C) Reconciling the cash balance per books with the cut-off bank statement and the bank confirmation. 
D) Comparing the entity's amortization and asset capitalization policies to other entities in the industry. 
A) Inspecting title documents to verify whether any assets are pledged as collateral. 
B) Confirming with third parties the details of arrangements to maintain financial support. 
C) Reconciling the cash balance per books with the cut-off bank statement and the bank confirmation. 
D) Comparing the entity's amortization and asset capitalization policies to other entities in the industry.

Question 5

Which level of assurance is provided by a public accountant as a result of an audit?

Accepted Answer

A) Complete assurance. 
B) Moderate assurance. 
C) Negative assurance. 
D) Positive assurance. 
A) Complete assurance. 
B) Moderate assurance. 
C) Negative assurance. 
D) Positive assurance.

Question 6

When there is material uncertainty about an auditee's ability to continue as a going concern is doubtful, and the issue has been fully disclosed in the notes to the financial statements, the auditor should issue a qualified report with a paragraph drawing attention to the going concern issue.

Accepted Answer

A) True 
 B)False

Question 7

If financial statements contain a very material departure from GAAP such that the financial statements are virtually useless, the auditor can render a (an)

Accepted Answer

A) Qualified "except for" opinion with reference to the departure. 
B) Adverse opinion with scope limitation reference. 
C) Adverse opinion with reference to the departure. 
D) Disclaimer of opinion. 
A) Qualified "except for" opinion with reference to the departure. 
B) Adverse opinion with scope limitation reference. 
C) Adverse opinion with reference to the departure. 
D) Disclaimer of opinion.

In which of the following circumstances may the auditor issue the standard unqualified, unmodified audit report?

Management has decided that the life of a piece of heavy equipment should be decreased from 15 years to 10 years thus increasing the annual amortization.The auditor agrees that this amortization period is more reflective of the nature of the asset.The type of audit report that should be issued is:

An independent auditor must consider whether the auditee has the ability to continue as a going concern.If a substantial doubt exists but disclosure is adequate and no other basis exists for modifying the report, under CICA section 5510, the auditor should

Which of the following auditing procedures most likely would assist an auditor in identifying conditions and events that may indicate substantial doubt about an entity's ability to continue as a going concern?

Which level of assurance is provided by a public accountant as a result of an audit?

When there is material uncertainty about an auditee's ability to continue as a going concern is doubtful, and the issue has been fully disclosed in the notes to the financial statements, the auditor should issue a qualified report with a paragraph drawing attention to the going concern issue.

If financial statements contain a very material departure from GAAP such that the financial statements are virtually useless, the auditor can render a (an)

Introduction to Auditing

Audit, Assurance, and Quality Control Standards

Professional Ethics and Auditor Responsibilities

Legal Liability

Preliminary Audit Planning: Understanding the Auditee

Assessing Risks and Internal Control

Audit Evidence and Assurance

Control Assessment and Testing

Audit Sampling

Revenues, Receivables, and Receipts Process

Purchases, Payables, and Payments Processtrue

Production and Payroll Process

Finance and Investment Process

Completing the Audit

Other Public Accounting Services and Reports

Fraud Awareness Auditing

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Exam 3: Reports on Audited Financial Statements and Audited Internal Controlt

In which of the following circumstances may the auditor issue the standard unqualified, unmodified audit report?

Management has decided that the life of a piece of heavy equipment should be decreased from 15 years to 10 years thus increasing the annual amortization.The auditor agrees that this amortization period is more reflective of the nature of the asset.The type of audit report that should be issued is:

An independent auditor must consider whether the auditee has the ability to continue as a going concern.If a substantial doubt exists but disclosure is adequate and no other basis exists for modifying the report, under CICA section 5510, the auditor should

Which of the following auditing procedures most likely would assist an auditor in identifying conditions and events that may indicate substantial doubt about an entity's ability to continue as a going concern?

Which level of assurance is provided by a public accountant as a result of an audit?

When there is material uncertainty about an auditee's ability to continue as a going concern is doubtful, and the issue has been fully disclosed in the notes to the financial statements, the auditor should issue a qualified report with a paragraph drawing attention to the going concern issue.

If financial statements contain a very material departure from GAAP such that the financial statements are virtually useless, the auditor can render a (an)

Introduction to Auditing

Audit, Assurance, and Quality Control Standards

Professional Ethics and Auditor Responsibilities

Legal Liability

Preliminary Audit Planning: Understanding the Auditee

Assessing Risks and Internal Control

Audit Evidence and Assurance

Control Assessment and Testing

Audit Sampling

Revenues, Receivables, and Receipts Process

Purchases, Payables, and Payments Processtrue

Production and Payroll Process

Finance and Investment Process

Completing the Audit

Other Public Accounting Services and Reports

Fraud Awareness Auditing

Filters