A1

Question 1

Identify 3 inherent limitations of an audit

Answer 1

1. nature of financial reporting
2. nature of audit procedures
3. balance between benefit and cost

Question 2

Define a component auditor

Answer 2

and auditor who performs work on the financial information of a component that will be used as audit evidence for a group audit.

Question 3

Identify 2 requirements that are necessary to reference a component auditor in the auditors report

Answer 3

• performed audit in accordance with GAAS or PCAOB

- the component auditors report is not restricted use

Question 4

When should an auditors opinion be modified

Answer 4

• FS as a whole are materially misstated or
• unable to obtain sufficient appropriate evidence to conclude that the FS as a whole are free from material misstatement