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WorksheetsAudit Report
Total questions: 15
Worksheet time: 30mins
Auditing standards require that the audit report must be titled and that the title must:
indicate if the auditor is a proprietorship, partnership, or incorporated.
indicate if the auditor is a CPA.
not include any discriminatory language.
include the word "independent."
To emphasize the fact that the auditor is independent, the addressee of the audit report is usually not:
the company's management.
the board of directors of the client company.
the stockholders of the client company.
either B or C.
The purpose of the introductory paragraph in the standard unqualified report is:
to identify the financial statements that were audited and the dates and time periods covered by the report.
to communicate the responsibilities of management in preparing the financial statements and to clarify the respective roles of management and the auditor.
to identify the entity that was audited.
all of the above.
The scope paragraph of the standard unqualified audit report states that the audit is designed to:
discover all errors and/or irregularities.
discover material errors and/or irregularities.
obtain reasonable assurance whether the statements are free of material misstatement.
conform to generally accepted accounting principles.
The audit report date on a standard unqualified report indicates:
the last date on which users may institute a lawsuit against either client or auditor.
the last day of the auditor's responsibility for the review of significant events that occurred subsequent to the date of the financial statements.
the last day of the fiscal period.
the date on which the financial statements were filed with the Securities and Exchange Commission.
An adverse opinion is issued when the auditor believes:
the financial statements would be found to be materially misstated if an investigation were performed.
some parts of the financial statements are materially misstated or misleading.
the auditor is not independent.
A. the overall financial statements are so materially misstated that they do not present fairly the financial position or results of operations and cash flows in conformity with MASB
A disclaimer of opinion may be issued in which of the following instances?
The auditor's scope has been restricted due to circumstances beyond the client's control.
There are highly material misstatements in the financial statements.
The auditor has doubts related to an entity's ability to continue as a going concern.
A disclaimer may be issued for circumstances discussed in A and C.
Whenever an auditor issues a standard unqualified audit report, the implication is the auditor:
believes the financial statements to be presented fairly in accordance with MFRS except for a specific aspect of them.
does not believe the financial statements are presented fairly in accordance with MFRS.
does not know if the financial statements are presented fairly in accordance with MFRS.
believes the financial statements are presented fairly in accordance with MFRS.
If a misstatement is immaterial to the financial statements of the entity for the current period, but is expected to have a material effect in future periods, it is appropriate to issue a(n):
disclaimer of opinion.
unqualified opinion.
qualified opinion.
adverse opinion.
When the auditor believes a company's financial statements are misleading because they were not prepared in conformity with MFRS, the auditor must issue a(n):
disclaimer of opinion.
qualified opinion.
adverse opinion.
qualified or an adverse opinion, depending on materiality.
The introductory paragraph of the standard audit report states that the financial statements are:
the joint responsibility of management and the auditor.
the responsibility of the auditor.
the responsibility of management.
none of the above.
The introductory paragraph of the standard audit report states that the auditor is:
jointly responsible for the financial statements with management.
responsible for the financial statements.
responsible for the opinion on the financial statements.
responsible for the financial statements and the opinion on them.
Whenever an auditor issues a qualified opinion, the implication is that the auditor:
does not believe the financial statements are presented fairly.
believes the financial statements are presented fairly.
does not know if the financial statements are presented fairly.
believes the financial statements are presented fairly "except for" a specific aspect of them.
If the auditor lacks independence, a disclaimer of opinion must be issued:
only if it is material but not highly material.
if the client requests it.
in all cases.
only if it is highly material.
Items that materially affect the comparability of financial statements generally require disclosure in the footnotes. If the client refuses to properly disclose the item, the auditor may be required to issue:
an unqualified opinion.
an adverse opinion.
a qualified opinion.
the disclaimer.
