Exam 12: The Auditors Reporting Obligations

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:

The auditor of Kennedy 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?

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:

Muir 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:

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

The auditor's report now requires a description of key audit matters, which are:

Coggin 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 report but is reasonably certain to have a substantial effect in later years.If the change is adequately disclosed in the notes to the financial report the auditor should issue a report with a(n):

A solicitor limits a response concerning a litigation claim because the solicitor is unable to determine the likelihood of a favourable 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?

When an audited financial report is presented in a document containing other information, the auditor:

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):

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 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:

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

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

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

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?

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

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

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

The Corporations Act 2001 requires the auditor to report on certain matters only on an exception basis.This means that the auditor need only report particulars of any deficiency, failure or shortcoming in respect of these matters.Which of the following matters should not be reported on an exception basis?

The information gap is: