A1- M9 Reporting on a Single Statement

Question 1

T/F: An audit of a single financial statement cannot be in conjunction with an entity’s complete set of financial statements

Answer 1

False. They can be audited

Question 2

What three things should the auditor obtain an understanding of when auditing a single financial statement or specific element of a financial statement?

Answer 2

The purpose, intended users, and steps taken by management

Question 3

When auditing both a single f.statement or a specific element and an entity’s complete set of f.statements, the auditor can use ______ obtained during the audit of the complete set of financial statements in the audit of the statement or specific element

Answer 3

Audit evidence

Question 4

When auditing a single financial statement, the auditor should determine materiality for what rather than for the complete set of f.statements?

Answer 4

The single financial statement

Question 5

When auditing a specific element the auditor should determine materiality for what rather than for the aggregate of all elements or the complete set of f.statements?

Answer 5

Each element

Question 6

What should the auditor do when he/she is engaged to audit a complete set of financial statements and a single financial statement or a specific element of a f.statement?

Answer 6

1) Issue a separate auditors report
2) Indicate in the report on a specific element the date of the auditors report on the complete set of financial statements

Question 7

If a modified opinion is rendered on the complete set of f.statements and is relevant to the audit then what two opinions should either be issued?

Answer 7

Either a adverse opinion if there is a GAAP issue or Disclaimer of Opinion if there is a GAAS issue

Question 8

Is a single financial statement considered to be a major portion of a complete set of f.statements?

Answer 8

Yes. B/C of this, an unmodified (unqualified) opinion should not be expressed on a single f.statement if the auditor has either expressed an adverse or disclaimer of opinion on the f.statements as a whole

Question 9

If an auditor has expressed an adverse or disclaimer of opinion on the f.statements as a whole, the auditor cannot then express an unmodified (unqualified) opinion on a single f.statement. However, an unmodified (unqualified) opinion can be expressed on a specific element only if

Answer 9

1) The opinion on the specific element does not accompany the opinion on auditors report on the complete set of financials
2) The specific element is not a major portion of a company’s financials

Question 10

If there is an incomplete presentation, how should it be reported?

Answer 10

In either an emphasis of matter paragraph for non issuers or explanatory paragraph