Exam 7: The Auditors Report

If the previous period's financial statements are unaudited, and sufficient appropriate evidence is unavailable, then the current auditor's report will be:

An adverse opinion is most likely to be appropriate when there is:

i. The law requires the disclosure and presentation requirements for General Purpose Financial Reports outlined by the AASB. Which financial statements are required by these accounting standards? ii. Which other major piece of legislation outlines the scope of the contents of a financial report? iii. Identify one requirement of this piece of legislation with regards to each of the following: -the notes to the financial statements, and -the director's declaration.

Section 302.of the Corporations Act prescribes that disclosing entities must:

ASA 700 provides explanatory guidance on all of these points except:

Which of these factors could not be the cause of a material misstatement?

In addition to the requirements of ASA and the ISA standards, the Corporations Act also prescribes the auditor's reporting duties. Which of the following does not constitute one of those duties?

Which of these items does not form part of the financial report, as defined in the Corporations Act

Comparatives refer to amounts or disclosures of one or more previous periods that are presented on a comparative basis with those of the current period. ASA 710 (ISA 710) states that the auditor:

A standard unqualified audit report is not required to have which of the elements set out below?

The auditor of a reporting entity for which consolidated accounts are required has:

The emphasis of matter paragraph in an audit report would normally refer to the fact that the auditor's opinion is:

A company can have a review performed as an alternative to an audit for half-year reports. What is the difference in the opinion expressed in a review?

The opinion expressed on the consolidated statements of a company is the sole responsibility of:

Which of these statements concerning audit reporting on consolidated accounts is the least accurate?

The form and content of the auditor's report is specified within:

When the auditor performs an audit or review of half-year financial statements, they are not required to:

Toady.com is a new public phone and internet company heavily financed by the Eastpac Bank. During your audit of Toady.com you have found that the business is in the practice of signing up new customers with very little in the way of credit checks. You are concerned that the disclosure of bad and doubtful debts may not accurately reflect the true situation of the company. You notice that if you apply the standards correctly the bad and doubtful debts will have such an effect on the financial statements that capital adequacy requirements may be breached. When you approached management about the adequacy of these disclosures they told you that they were happy with the bad and doubtful debts at their current level, and that they would not be changing their method of application of the standard. What is your first obligation? What type of auditor's report will you issue, and why?

An emphasis of matter section in an audit report is:

i. Under what circumstances is a disclaimer of opinion appropriate? ii. Under what circumstances is an adverse opinion appropriate? iii. Under what circumstances is an emphasis of matter appropriate?