A1

Question 1

DUAL DATING

Answer 1

Used in subsequent events ONLY
NOT on comparative FS (previous YR audit)

Question 2

Reporting on Supplementary Information by designated acct Standard include a separate report paragraph section called ?

Answer 2

Include a separate report section (“Required Supplementary Information”)

Question 3

Statements on Auditing Standards & GAAP departure treated the same way in terms of justification.

Answer 3

The auditor is generally required to follow the guidance provided by the standard, and should be able to justify any departures.

Question 4

What triggers a change previously issued opinion (comparative FS)

Answer 4

When PY FS are restated to conform with GAAP… NOT FOR LACK OF CONSISTENCY.

Question 5

Do you make reference in the report when a change in accct. principle w/ IMM effect of the change on the comparability of the FS

Answer 5

NOT refer to the change in the auditor report
(no revision to the audit report necessary)

Question 6

Does an Imm justified departure from GAAP affect the opinion?

Answer 6

NOT affect the unmodified opinion

Question 7

What kind of opinion?
Material justified departure from GAAP

Answer 7

Qualified or Adverse OP

Question 8

What kind of opinion?
Material RP properly accounted but NOT adequately disclosed in FS

Answer 8

Qualified or Adverse OP

Question 9

For issuers… explanatory paragraph is required to be included in the Auditors report when….

Answer 9

Substantial doubt about the entity’s ability to continue as going concern exists.
If there were no other sig audit findings.. an UNQUALIFIED OP w/ explanatory paragraph = Appropriate.

Question 10

Non-issuer lack of consistency (significant change in acct. principle) should be referenced in what part of the opinion

Answer 10

Emphasis-of-matter paragraph

Question 11

Inventory can be valued @ what time

Answer 11

BS Date

Question 12

Disclaimer Op issued due to lack of sugg approp audit evidence… the auditor should disclose it at what paragraph?

Answer 12

Basis for the disclaimer Opinion…
NOT MNGMT NOR NOTES TO THE FS.

Question 13

Scope limitation like MGNM estimate should be treated like Documents as such Auditor should express

Answer 13

A qualified or disclaimer opinion

Question 14

FS not in conformity with GAAP rules regarding a capitalization of leases most likely express an?

Answer 14

Adverse Opinion

Question 15

Should auditor issue an adverse opinion when information comes to his/her attention that raises substantial doubt about the entity’s ability to continue as going concearn?

Answer 15

NO
This should be disclosed in an “emphasis-of-matter” or a separate section of the report (doubt remains) appended to an unmodified/unqualified OP.

Question 16

If acct change has no material effect on the FS (CY), but material future effect… the auditor should issue a ?

Answer 16

Unmodified Opinion.
Change is disclosed in the FN whenever the FS of the change period are presented , but does not have to recognize the change in CY.

Question 17

What OP should be expressed for a GAAP departure due to unusual circumstances, the statements would otherwise be misleading…

Answer 17

Unmodified
b/c the FS are not materially misstated.

Question 18

What kind of opinion should be issued when a CPA is “associated” w/FS of PUBLIC co, but has NOT audited or (interim) rvwd such FS?

Answer 18

Disclaimer Opinion
treat the statements as Docs.

Question 19

Compilation reports are related to PUBLIC or NON-PUBLIC entities?

Answer 19

NON-PUBLIC

Question 20

In which paragraphs in the auditor’s report reference to USGAAP?

Answer 20

Opinion (auditor’s opinion in conformity with GAAP) & MNGMT’s Responsibility paragraph( responsible of preparation of FS in accordance w/GAAP)

Question 21

Would auditor’s modify the same paragraph when rendering either a qualified OP due to a departure from GAAP or a qualified OP due to scope limitation?

Answer 21

YES, they both require modification on the Opinion section & Basis of the Opinion.

Question 22

Treat scope limitation like managements estimate effects are reasonable as DOCUMENTS which will trigger a …?

Answer 22

Qualified or disclaimer OP

Question 23

OJO** Material/Significant lack of consistency (change in acct principle) should be reported on what part of the OPINION

Answer 23

Emphasis -of -Matter
justified lack of consistency caused by material change & unmodified

Question 24

If FS prepared in accordance with Financial reporting framework generally accepted in other country non us parent auditor must obtain>?

Answer 24

Written representation from MNGMT of the US. ENTITY regarding the uses of the FS.

Question 25

Does the Auditor’s responsibility section changes when a qualified opinion is changed?

Answer 25

NO, auditor would modify Auditor’s responsibility when issuing a disclaimer of opinion but not qualified opinion

Question 26

Auditor would modify the Opinion section by adding an “except for” statement when…

Answer 26

Auditor Qualifies the opinion because of inadequate disclosure.

Question 27

Reporting Accountant

Answer 27

May accept the engagement but should consult with continuing CPA to ascertain all available facts relevant to forming a professional judgment

Question 28

Considerations in planning an audit engagement’s personnel requirements

Answer 28

1) engagement size & complexity
2) personnel availability
3) special expertise required
4) timing of the work to be performed
5) continuity and periodic rotation
6) opportunity on-the-job training

Question 29

If auditor decides not to Dual Date the report and sufficient appropriate audit evidence was prior to the completeness of the the subsequent events you always use…..

Answer 29

Use a later date… the date on which sufficient appropriate evidence was obtained including the procedures for subsequent events.

Question 30

Auditor exercising professional skepticism

Answer 30

Consider the reliability of the information to be used as audit evidence.

NOT AUTHENTICATE

Question 31

emphasis-of-matter paragraph required while not affecting the auditor’s unmodified opinion

Answer 31

To describe a material but justified change in accounting principle.

Question 32

Material & Pervasive =

Answer 32

Adverse OP

Question 33

Departure from GAAP (inadequate disclosure of material info) = What kind of OP?

Answer 33

Adverse OP

Question 34

An emphasis-of-matter paragraph is required when the financial statements are prepared in accordance with….

Answer 34

an applicable special purpose framework, such as the cash basis of accounting.

Note that an emphasis of matter paragraph may use the heading of “Emphasis of Matter” or any other appropriate heading.

Question 35

Before reissuing the prior year’s auditor’s report on the financial statements of a former client, the predecessor auditor should obtain letters of representation from the:

Answer 35

Successor auditor and the former client’s management.

Question 36

If an accounting change has no material effect on the financial statements in the current year, but a material future effect…

Answer 36

the auditor must ensure that the change is disclosed in the footnotes whenever the financial statements of the change period are presented, but does not have to recognize the change in the current year’s audit report.

UNMODIFIED OP