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

Due to time and staff restrictions the auditor was unable to attend the inventory stocktake at a remote branch location for Outback Ltd. The inventory at this site accounted for 30% of total assets. Alternative procedures were applied Satisfactorily. The auditor should issue:

Taylor Ltd has disclosed the fact that they are being sued for $1 million. Taylor Ltd reported a profit for the year of $10 million and has total assets of $15 million. You conclude that disclosure of the litigation is adequate. What Type of opinion should you express on the financial report of Taylor Ltd?

When a client will not make essential corporate mins available to the auditor, the auditor's report will probably contain a(n):

For a Corporations Act 2001 audit, the auditor has reporting obligations to:

When restrictions are imposed by the client, which significantly limit the auditor's ability to audit fixed assets (a material part of the balance sheet), the auditor generally should issue which of the following opinions?

The financial report of Quick Buck Ltd indicates that there may be some going concern problems. However, the auditor concludes, based on mitigating factors, that the client will most likely continue as a going concern during the next year. The mitigating factors are adequately disclosed in the accounts. What type of audit opinion should the auditor express?

All of the following are true with respect to the auditor's consideration of information other than the audited financial report that are included in a client's annual report except:

Which of the following situations will not result in modification of the auditor's report because of a scope limitation?

An entity operates in a highly regulated industry with special, legislated reporting requirements, with which it has complied. However, this has resulted in it not complying with the requirements of some Australian Accounting Standards. Note 1 to the accounts states that the accounts are prepared in conformity with both the special legislated Reporting requirements and the Australian Accounting Standards. What type of audit opinion should be issued?

If an entity's external auditor expresses an unmodified opinion as a result of the audit of the entity's financial report, readers of the auditor's report can assume that:

Your client has followed approved accounting standards but a note to the financial report indicates the early application of an accounting standard that has a pervasive effect on the financial report in advance of its effective date. The note details the reasons for this view. You, as the auditor, concur that this additional note disclosure is necessary to give a true and fair value. What type of opinion should you issue?

A solicitor limits a response concerning a litigation claim because the solicitor is unable to determine the likelihood of an unfavourable outcome. Which type of opinion should the auditor express if the litigation is adequately disclosed And the range of potential loss is material in relation to the client's financial report considered as a whole?

An auditor has been unable to obtain the audited financial report for the entity's major foreign subsidiary due to civil unrest in that country. The appropriate auditor's report is:

An entity is being sued for substantial damages for producing a faulty product. However, while the result of the litigation will not be known for some time, it believes that the claim is unjustified and that it will be successful in defending the action. It has included appropriate reference to the lawsuit in the financial report. What type of audit opinion should be issued?

The directors of a listed company refuse to disclose directors' remuneration of $100 000 on the basis that it is not material. Net profit after tax is $20 million and net assets are $50 million. The appropriate auditor's report is:

Your client has followed approved accounting standards but a note to the financial report indicates that the application of certain standards results in the financial report being materially misstated. The note details the reasons for this view.You do not concur with this view. What type of opinion should you issue?

When audited financial statements are presented in a document containing other information, the auditor:

Under which of the following set of circumstances might an auditor disclaim an opinion?

An auditor concludes that there is a material inconsistency in the other information in an annual report to shareholders containing an audited financial report. If the auditor concludes that the financial report does require revision, but the Client refuses to revise or eliminate the material inconsistency, the auditor may:

Jodie Ltd, a listed company, refuses to separately disclose directors' fees of $2.5 million on the basis that they believe they are quantitatively immaterial. Profit for the last year was $980 million. The auditor should issue a(n):