A1 Final

Question 1

When planning to issue audit on specific financial framework to a specific transaction, what should auditor obtain an understanding of?

Answer 1

Form and substance of specific transaction

Question 2

If information provided to auditor is inconsistent with the financial statements which is the next step the auditor takes?

Answer 2

Request client to revise information

Question 3

What happens when a client omits a statement of cashflows?

Answer 3

Explain to client it is a violation of GAAP and issue qualified or adverse

Question 4

How will the opinion be changed if the auditor discovers the titles on the statements are improper?

Answer 4

Qualified opinion with a basis for modification paragraph

Question 5

What type of opinion is issued when an auditor of a nonissuer is found to lack independence with respect to the entity?

Answer 5

A disclaimer of opinion

Question 6

Define disclaimer of opinion

Answer 6

When an accountant is associated with the FS of a public entity but has not audited or reviewed such statements

Question 7

If FS contain a GAAP departure due to circumstances that were unforeseen and not noted by auditor, what type of opinion would be issued?

Answer 7

Unmodified

Question 8

What part of the opinion states the auditors responsibility to express an opinion on FS under US auditing stds?

Answer 8

AUDITORS RESPONSIBILITY

Question 9

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

Answer 9

Immediately follows the basis of opinion

Question 10

What are the 4 things in the intro paragraph?

Answer 10

1. Nature of engagement (audit)
2. FS covered in audit
3. name of entity being audited
4. dates covered by FS

Question 11

What type of report is issued for a nonissuer the lacks consistency caused by a material change in GAAP?

Answer 11

Unmodified opinion –> emphasis of mater paragraph after the opinion

Question 12

If reissuing PY Audit report on a former client, who should the predecessor auditor obtain letters from?

Answer 12

letters of rep from successor auditor AND former clients mgmt

Question 13

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

Answer 13

Statement on Auditing Standards ( SAS)

Question 14

In reporting comparative FS, when should the auditor change the previously issued opinion?

Answer 14

When Py FS are restated to conform with GAAP

Question 15

What type of report is issued when the auditor does not present the predecessor report?

Answer 15

unmodified w/ other matter paragraph

Question 16

When would an auditor usually issue an audit unmodified audit opinion w/o EOM?

Answer 16

When the auditor auditor decides to make reference to the audit of component auditor as basis, in part, for opinion.

Question 17

What is the purpose of dual dating

Answer 17

Used when there is a subsequent event occurring after the original date of report and auditor wants to extend responsibility only for the one event

Question 18

What term identifies a requirement for audit evidence?

Answer 18

appropriate audit evidence

Question 19

If an auditor expresses an adverse opinion, what should that opinion paragraph include?

Answer 19

Should include direct reference to separate paragraph disclosing the basis for opinion

Question 20

if disclaiming an opinion due to lack of audit evidence , where should the the auditor refer to the situation in?

Answer 20

disclosed in the Auditors responsibility AND discussed in an additional paragraph before opinion title “Basis for disclaimer of opinion”

Question 21

When is a emphasis of matter paragraph needed?

Answer 21

Going concern
Accounting principles that have changed
Audit opinion subjected to change due to uncovered fact
Special purpose framework

Question 22

Under OCBOA, what is the title for statement of revenue and expenses?

Answer 22

Statement of income-regulatory basis

Question 23

What does the wording “In our opinion, with the foregoing explanation, the FS referred to above present fairly” represent?

Answer 23

Inappropriate reporting

Question 24

What are the types of Special purpose frameworks?(5)

Answer 24

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

Question 25

If substantial doubt - what is included?

Answer 25

Going concern is mentioned in EOM