Exam 13: The Auditors Reporting Obligations Part Five: Other Assurance Services

The auditor's best course of action with respect to 'other financial information' included in an annual report containing the auditor's report is to:

When an adverse opinion is expressed, the opinion paragraph should include a direct reference to:

The auditor of Shakey Ltd has serious doubts that the entity will continue as a going concern. There is adequate disclosure of this significant uncertainty in the notes to the financial report. The uncertainty is the result of a single Factor affecting the client. What type of audit opinion should the auditor express?

When an audited financial report is presented in a client's annual report containing other information, the auditor should:

Abbot, as principal auditor for the consolidated financial report, finds that the audit of a major subsidiary is qualified by another auditor. Abbot does not consider the qualification to be material relative to the consolidated financial report. What recognition, if any, must Abbot make in his auditor's report to the qualified report of the auditor of the subsidiary?

Below are three possibilities for improving the communication effectiveness of the auditor's report: I:giving the auditor's opinion on the financial report greater emphasis by placing it at the beginning of the auditor's report. II:changing the presentation and positioning of generically-worded paragraphs explaining the respective responsibilities of management (or those charged with governance) and of the auditor to make them more useful. III:addressing the lack of common meaning of technical terms used in the auditor's report.Which combination of these do many users consider will cause this improvement?

Your client, Blunt Ltd, is being sued by one of its competitors for $20 million for an alleged patent infringement.Your client has assets of $40 million and a reported profit of $10 million. The client has disclosed the lawsuit in a note to the accounts along with a statement indicating that they intend to vigorously defend the suit and are Confident of winning the suit. Your independent legal advice supports this view and you are satisfied with the Details provided by the client in the notes to the accounts. What type of opinion should you express on the Financial report of Blunt Ltd?

An auditor would issue an adverse opinion if:

The information gap is:

When a contingency is resolved immediately subsequent to the issuance of a report that was modified with respect to the contingency, the auditor should:

Huggins Ltd is required to but does not wish to prepare and issue a statement of cash flows as part of its financial report. In these circumstances, the auditor's report should include:

Which of the following statements is not true with regards the auditor's responsibility where a client entity decides to publish its audited financial report on its website.

When a client declines to include a statement of cash flows in its financial report, the auditor's report will usually:

With respect to the auditor's duty to determine that certain matters related to the conduct of the audit are communicated to the audit committee, the communication:

If the auditor believes that there is minimal likelihood that resolution of an uncertainty will have a material effect on the financial report, the auditor would issue a(n):

Morris Ltd has reported losses two years in a row and has a debt to total assets ratio of 0.90. In addition, a $5 million debenture is maturing next year and the company has not set aside any funds to repay the debt. The parent entity of Morris Ltd has decided to repay the debenture when it matures and provide sufficient funding to cover any additional Losses that Morris Ltd might incur. Morris Ltd has not disclosed these arrangements in its financial report and the Auditor is adamant that it should be brought to the shareholders' attention. What type of opinion should the auditor Express on the financial report of Morris Ltd?

Your audit client has not written inventory down to net realisable value in accordance with approved accounting standards. The write-down would reduce current assets by 15 per cent and net profit before income tax by 11 per cent. What type of auditor's report should you issue?

At the end of the audit the auditor has two issues outstanding. The first is a disagreement with those charged with governance concerning the use of an inappropriate valuation method for inventory (LIFO). The second issue is Significant uncertainty as to whether the entity will continue as a going concern, which is adequately disclosed in The notes to the accounts. What type of audit opinion should the auditor express?

For the purposes of the approved auditing standards, what are the differences, if any, between the phrases 'true and fair view' and 'presents fairly, in all material respects'?

Which of the following statements are true for fair presentation frameworks? A fair presentation framework: