AUD 1

Question 1

What is the auditors responsibility?

Answer 1

To express and opinion on the financial statements.

Question 2

U.S. GAAP is a term that is used to?

Answer 2

Encompass the convention, rules, and procedures necessary to define U.S. GAAP at a particular time.

Question 3

The PCAOB was established by?

Answer 3

SOX 2002.

Question 4

GAGAS use which term to describe a professional requirement to comply with standards or provide an explanation why they weren’t followed.

Answer 4

Presumptively mandatory requirement.

Question 5

When issuing a qualified opinion because of an insufficiency of audit evidence, where do you refer to it at?

Answer 5

In the Auditor’s Responsibility paragraph and discussed in an explanatory paragraph BEFORE the opinion paragraph. Titled “Basis for the Qualified Opinion.”

Question 6

Mitigating factors for going conern?

Answer 6

Increase ownership, borrow money, restructure debt, sell assets, and to reduce/delay expenditures.

Question 7

Scope limitations result in what?

Answer 7

Qualified or disclaimer.

Question 8

Adverse opinion is issued when?

Answer 8

The financial statements are not in accordance with GAAP.

Question 9

If there is doubt about a company to continue what phrases should be used?

Answer 9

The terms going concern and substantial doubt. Also there should be included an emphasis of matters paragraph after the opinion paragraph.

Question 10

If presenting reports of a predecessor auditor, the successor auditor should include?

Answer 10

Not name the former auditor, indicate the type of report they formed, indicate the reasons why the type or report was issued.