ACCT 431 Ch 12 Repts Audited FS

Which of the

following statements is not

included in the Auditor’s Responsibility section of the standard

(unmodified) report?

• “In accordance with accounting principles generally accepted in the United States of America.”

• “We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.”

• “An audit also includes evaluating the appropriateness of accounting policies used….”

• “Those standards require that we plan and perform the audit to obtain reasonable assurance...”

Which of the

following statements is not

included in the Auditor’s responsibility section of the standard

(unmodified) report on the entity's financial statements?

• “We have audited the accompanying financial statements…”

• “Those standards require that we plan and perform the audit...”

• “The procedures selected depend upon the auditor’s judgment…”

• “An audit involves performing procedures to obtain audit evidence about the amounts and disclosures…”

If financial

statements contain a material but non-pervasive departure from generally

accepted accounting principles, the auditors should render a(n)

• Qualified opinion with reference to departure.

• Adverse opinion with scope limitation reference.

• Adverse opinion with reference to departure

• A. Disclaimer of opinion.

A report that

acknowledges reliance on the reports of component auditors is a type of

report modification known as a(n)

• Qualification

• Division of responsibility

• Expansion of scope

• Scope limitations

.Auditors will issue an adverse opinion when

• A severe scope limitation has been imposed by the entity.

• A violation of generally accepted accounting principles is sufficiently material and pervasive that a qualified opinion is not justified.

• A qualified opinion cannot be rendered because the auditors lack independence.

• The entity's ability to continue as a going concern is subject to substantial doubt.

When auditors lack independence, which of the following is true about the report on the entity's financial statements that should be issued?

• The auditors should disclaim an opinion and should state specifically that they are not independent.

• The auditors should disclaim an opinion but not mention that they are not independent.

• The auditors should issue an unmodified opinion with an other-matter paragraph stating that they are not independent.

• The auditors should issue a qualified opinion with an other-matter paragraph stating that they are not independent.

Independent auditors must consider whether the entity has the ability to continue as a going concern. If a substantial doubt exists but disclosure is adequate and no other basis exists for modifying the report, the auditors would normally

• Disclaim an opinion.

• Express an adverse opinion.

• Qualify the opinion.

• Express an unmodified opinion with an emphasis-of-matter paragraph describing the going-concern uncertainty.

When disclaiming an opinion due to a client-imposed scope limitation, auditors should describe the nature of the scope limitation in an additional paragraph and modify the

• Introductory paragraph

• Introductory paragraph and Auditor’s Responsibility section

• Introductory paragraph, Auditor’s Responsibility section, and opinion paragraph

• Auditor’s Responsibility section and opinion paragraph

When there has been a change in accounting principles, but the effect of the change on the comparability of the financial statements is not material, the auditors should

• Refer to the change in an emphasis-of-matter paragraph.

• Explicitly concur that the change is preferred.

• Not refer to consistency in the report.

• Refer to the change in the opinion paragraph

In which of the following should an auditors’ report refer to the lack of consistency when there is a change in accounting principle that is significant?

• The Auditor’s Responsibility section.

• The opinion paragraph.

• An emphasis-of-matter paragraph following the opinion paragraph.

• An emphasis-of-matter paragraph before the opinion paragraph.