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

King, CPA, was engaged to audit the financial report of Newton Company after its fiscal year had ended. King neither observed the inventory count nor confirmed the receivables by direct communication with debtors but was Satisfied concerning both after applying alternative procedures. King's auditor's report most likely contained a(n):

An auditor concludes that there is a material inconsistency in the other information in an annual report to shareholders containing audited financial statements. If the auditor concludes that the financial statements do not require revision (it is the other information which is inconsistent with the auditor's knowledge), but the client refuses to revise or Eliminate the material inconsistency, the auditor may:

Morris Ltd changed from the straight-line method to the declining balance method of depreciation for all newly acquired assets. This change has no material effect on the current year's financial statements but is reasonably Certain to have a substantial effect in later years. If the change is adequately disclosed in the notes to the financial Statements, the auditor should issue a report with a(n):

Chris Yerkes, an independent auditor, was engaged to perform an audit of the financial report of Apex Ltd one month after its financial year had ended. Although the inventory count was not observed by Yerkes and accounts receivable Were not confirmed by direct communication with debtors, Yerkes was able to gain satisfaction by applying alternative Auditing procedures. Yerkes' auditor's report will probably contain:

An auditor's report on comparative financial reports should be dated as of the date of the:

Information in the chairman's address, accompanying the financial report in an entity's annual report, is inconsistent with information contained in the audited financial report. The entity refuses to alter the chairman's address. The Appropriate auditor's report is:

When the audited financial report of the prior year is presented together with those of the current year, the continuing auditor's report covers:

When an auditor expresses an adverse opinion, the opinion paragraph should include:

The financial report of Super Electrix Ltd indicates that there are going concern problems. After considering additional audit evidence, the auditor concludes that the client will not continue as a going concern during the next year. What Type of audit opinion should the auditor express?

On 2 July 20X0 Pretty Paint Ltd received a notice from its primary suppliers that all wholesale prices would be increased by 10%, to be effective immediately. On the basis of the notice Pretty Paint Ltd revalued its 30 June 20X0 Inventory to reflect the higher costs. The details of the adjustment were disclosed in the notes to the financial report.The inventory adjustment was material. The auditor of the 30 June 20X0 financial report would issue:

The basic elements of the auditor's standard report for a Corporations Act 2001 audit include all of the following except:

In which of the following circumstances would an adverse opinion be appropriate?

Certain circumstances, while not affecting the auditor's opinion on the financial report, may require the auditor to add an Emphasis of Matter paragraph to the report. These circumstances include all of the following except where:

An auditor was unable to obtain an audited financial report or other evidence supporting an entity's investment in a foreign subsidiary considered material to the financial report. Between which of the following opinions Should the entity's auditor choose?

The auditor is unable to reach a conclusion as to the reasonableness of management's representations. The auditor will have to consider issuing a(n):

Shaun Insurance Ltd is trading profitably at 30 June 20X0 as reflected in its financial report. On 24 July 20X0 there is a hailstorm in Sydney that creates unprecedented damage. Although Shaun had undertaken all the normal Reinsurance processes, it is unlikely that they will be able to pay all claims and there is a high probability that the Company will have to be wound up. The auditor believes that the financial report as at 30 June 20X0 is true and fair And that this natural disaster is adequately disclosed. The auditor should issue:

An entity is facing significant litigation as a result of dumping oil in the ocean. This is adequately disclosed in the notes to the financial report. The appropriate auditor's report is: