A1

Question 1

What standards must an auditor of an nonissuer conduct an audit in accordance with? (ASB or PCAOB)

Answer 1

ASB standards

Question 2

What is the most authoritative level of auditing guidance for audits of nonissuers?

Answer 2

Statement on Auditing Standards

Question 3

What word indicates a presumptively mandatory requirement?

Answer 3

Should

Question 4

What is the auditors responsibility regarding financial statements?

Answer 4

To express an opinion on FS based on an audit

Question 5

What term identifies a requirement for audit evidence?

Answer 5

Appropriate

Question 6

How does an auditor obtain reasonable assurance?

Answer 6

Plan the work an properly supervise assistants

Question 7

What factor should most influence the auditors decision to modify the audit opinion of an issuer’s financial statements?

Answer 7

The effect of a misstatement on the financial statements taken as a whole

Question 8

If FS of company fail to disclose information required by GAAP, what opinion(s) should be expressed?

Answer 8

Qualified or Adverse, depending on pervasiveness

Question 9

Where does the Critical Audit Matters section go in the audit opinion?

Answer 9

Immediately follows the Basis for Opinion

Question 10

What does the introductory paragraph include for nonissuer?

Answer 10

1. Nature of engagement (audit)
2. F/S covered in the engagement
3. Name of entity of F/S being audited
4. Dates covered by F/S

Question 11

What type of opinion would be issued if a company has an inadequate disclose of a material related party transaction?

Answer 11

Qualified or adverse opinion

Question 12

The opinion paragraph in and adverse opinion should include:

Answer 12

a direct reference to a separate paragraph disclosing the basis for opinion

Question 13

When changing the opinion - the auditor must disclose the reasons in an EOM/ Other matters OR explanatory paragraph which includes 5 things

Answer 13

Date of auditor's previous report
Opinion type previously issue
Reason for the prior opinion 
Changes that have occurred 
Statement that the "opinion...is different"

Question 14

Which paragraph includes the following language: “We did not audit the financial statements of X Company..”?

Answer 14

The auditors responsibility paragraph

Question 15

When should the date of the prior-period report be used?

Answer 15

Should be use as long as the FS are not restated, revised, or significant changes have occurred

Question 16

What are the 5 special purpose frameworks?

Answer 16

1. Cash Basis and modified cash basis
2. Tax basis
3. Regulatory basis
4. Contractual basis
5. Other basis