Audit Report

Audit Report

Work through this exercise carefully.

Multiple Choice

Why is it important that auditor declares independence in the audit report?

• give confidence to users

• prove auditor is independent

Multiple Select

Which of the following are management's responsibilities...

• prepare financial statement

• application of accounting policies and estimates

• fraud and error

• systems and controls

Multiple Choice

If the auditor wishes to draw attention to a particular matter, but agrees with the financial statements an ‘emphasis of matter’ paragraph will be included in the audit report.

• true

• false

Multiple Choice

Which of the following NOT a reason that an auditor qualify an audit report:

• accounting policies by management not reasonable

• insufficient evidence obtained

• accounting treatment not in accordance to accounting standards

• non disclosure of material fraud impacting financial statements

Multiple Choice

In our opinion, except for the effect on the financial statements of the matter referred to in the preceding paragraph, the financial statements give a true and fair view.

Type of report?

• Disclaimer

• Adverse

• Qualified

• Unqualified

Multiple Choice

Which of the following would result in a qualification of the audit report?

• Significant Inventory count were not conducted

• Significant internal controls are very weak

• Unable to get confirmation from a significant receivable

Multiple Choice

There are TWO reasons for issuing a qualified report - disagreement and insufficient evidence.

• true

• false

Multiple Choice

A disagreement which is material and pervasive is of such significance that the financial statements do not give a true and fair view. In this case, the auditor will most likely issue a/an____

• adverse opinion

• qualified opinion

• unqualified opinion

• disclaimer of opinion

Multiple Choice

_{There are 2 types of modified but not qualified reports...}

_{Emphasis of Matter}

_{This refers specifically to matters in the FS}

_{Other Matters}

_{This refers to anything else the auditor may wish to bring to the users attention}

• true

• false

Multiple Choice

This type of modified but still unqualified report draws attention to fundamental issue in the financial statements.

• other matters

• adverse opinion

• emphasis of matter

• none of the choices

Multiple Choice

_{Purpose of an Emphasis of Matter paragraph is to draw users' attention in specific circumstances to other financial statement matters that are NOT key audit matters (KAM).}

• true

• false

Multiple Select

Other information is anything in the annual report (except for the FS and auditors report). The auditor must read the other information and see if:

• There’s a material inconsistency between the other information and the FS

• There’s a material inconsistency between the other information and the auditor’s knowledge

• There's a material misstatement of fact in the other information