An Auditee Uses a Cut-Off Date Other Than the Balance

Multiple Choice

An auditee uses a cut-off date other than the balance sheet date to ensure PPE purchases have been recorded in the proper period.What impact will this have on the audit?

A) No reliance on internal controls for PPE is possible in this audit and a substantial approach must be taken.
B) No additional audit testing is required beyond the cut-off date.
C) The audit opinion must be modified due to a material GAAP departure in the financial statements.
D) The auditor should verify both the cut-off and the transactions in the roll-forward period.