Exam 16: Applying Professional Judgment to Form the Audit Opinion and Issue Theaudit Report

If information is included the audit report relating to a discrepancy between a company's MD & A and comparative information from other periods, it would appear in a(n) ________ paragraph.

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(Multiple Choice)

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Question 1

Correct Answer:

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What are the various causes of misstatements? Are they intentional?

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(Essay)

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Question 2

Correct Answer:

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Misstatements have various causes, such as arithmetical mistakes (e.g., an addition error in a physical inventory count), use of inappropriate accounting principles, incorrect application of accounting principles, and disagreements about valuation or other estimates. They may occur accidentally or through misunderstanding, be the result of embezzlement, or be deliberate misrepresentations. A key qualitative factor in the auditor's assessment is evidence of deliberate misstatements intended to improve or defer earnings to achieve management's goals. These goals, such as obtaining an earnings-based bonus, may not be aligned with those of the company's capital providers, who are usually the most important users of the audited financial statements.

The three criteria for fairness of presentation reporting suggest ________ reasoning for accounting.

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(Multiple Choice)

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Question 3

Correct Answer:

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To assess fair presentation, the audit engagement partner considers the results of the final overall financial statement analysis, and assesses whether the overall presentation, structure, and content of the financial statements and notes represent the underlying transactions and events fairly, from the perspective of users. The auditor must be satisfied that the information presented in the financial statements is all of the following EXCEPT ________.

(Multiple Choice)

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Question 4

Before adjusting entries proposed by the auditors are included in financial statements, they must be approved by the ________.

(Multiple Choice)

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Question 5

When a report is double-dated, the auditor has no responsibility for other events that have occurred after the end of fieldwork.

(True/False)

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Question 6

The most common reporting framework in Canada is the ________.

(Multiple Choice)

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Question 7

Which of the following statements regarding fair presentation is FALSE?

(Multiple Choice)

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Question 8

Further possible misstatements are those that could exist over and above the total of known and likely misstatements because of the fundamental limitations of auditing.

(True/False)

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Question 9

If an audit report contains information relating to a company's MD&A, it would be found in a(n) ________ paragraph.

(Multiple Choice)

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Question 10

The Orange Corporation was audited for the year-ended December 31, the fieldwork was completed on January 25, and the audit report was delivered on February 15. The auditor learned about a two-for-one stock split on February 1. How should the report be dated?

(Multiple Choice)

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Question 11

What is "dual dating" in the audit report?

(Essay)

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Question 12

Likely misstatements ________.

(Multiple Choice)

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Question 13

Auditors are responsible to search for both types of subsequent events between ________.

(Multiple Choice)

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Question 14

Subsequent to the issuance of the audit report, the auditor became aware of facts existing at the report date that would have affected the report had the auditor then been aware of such facts. After determining that the information is reliable, the auditor should ________.

(Multiple Choice)

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Question 15

Briefly explain the auditor's responsibility for the subsequent discovery of facts that occurred between the date of the financial statements and the date of the auditor's report.

(Essay)

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Question 16

________ paragraphs relate to information that is not required to be disclosed in the financial statements.

(Multiple Choice)

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Question 17

Dual dating refers to instances of dating the audit report as of the date that financial statements are approved by the auditee's responsible parties (e.g., the company's board of directors) and attaching an additional later date to disclosure of a significant subsequent event that requires financial statements to be amended.

(True/False)

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Question 18

Which of the following statements regarding management estimates is FALSE?

(Multiple Choice)

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Question 19

Arithmetical mistakes, use of inappropriate accounting principles, incorrect application of accounting principles, and disagreements about valuation or other estimates are the causes of ________.

(Multiple Choice)

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Question 20

Showing 1 - 20 of 45

If information is included the audit report relating to a discrepancy between a company's MD & A and comparative information from other periods, it would appear in a(n) ________ paragraph.

What are the various causes of misstatements? Are they intentional?

The three criteria for fairness of presentation reporting suggest ________ reasoning for accounting.

Before adjusting entries proposed by the auditors are included in financial statements, they must be approved by the ________.

When a report is double-dated, the auditor has no responsibility for other events that have occurred after the end of fieldwork.

The most common reporting framework in Canada is the ________.

Which of the following statements regarding fair presentation is FALSE?

Further possible misstatements are those that could exist over and above the total of known and likely misstatements because of the fundamental limitations of auditing.

If an audit report contains information relating to a company's MD&A, it would be found in a(n) ________ paragraph.

The Orange Corporation was audited for the year-ended December 31, the fieldwork was completed on January 25, and the audit report was delivered on February 15. The auditor learned about a two-for-one stock split on February 1. How should the report be dated?

What is "dual dating" in the audit report?

Likely misstatements ________.

Auditors are responsible to search for both types of subsequent events between ________.

Subsequent to the issuance of the audit report, the auditor became aware of facts existing at the report date that would have affected the report had the auditor then been aware of such facts. After determining that the information is reliable, the auditor should ________.

Briefly explain the auditor's responsibility for the subsequent discovery of facts that occurred between the date of the financial statements and the date of the auditor's report.

________ paragraphs relate to information that is not required to be disclosed in the financial statements.

Which of the following statements regarding management estimates is FALSE?

Arithmetical mistakes, use of inappropriate accounting principles, incorrect application of accounting principles, and disagreements about valuation or other estimates are the causes of ________.

Introduction to Auditing

Auditors Professional Roles and Responsibilities

Auditors Ethical and Legal Responsibilities

Reports on Audited Financial Statements

Preliminary Audit Planning: Understanding the Auditees Business

Assessing Risks in an Audit Engagement

Internal Control Over Financial Reporting

Audit Evidence and Assurance

Control Assessment and Testing

Audit Sampling

The Revenues, Receivables, and Receipts Process and Cash Account Balance

The Purchases, Payables, and Payments Process

Payroll and Production Processes

The Finance and Investment Process

Completing the Audit Work

Other Public Accounting Services and Reportsreviews and Compilations

Professional Rules of Conduct Details and Auditor Responsibilities

Part I the Audit of Accounting Estimates: Basic Material Relating to Accountingestimates

Legal Liability Cases

Other Professional Accounting Services and Reports, Including Fraud

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