AUD 1 - Audit Reports

Question 1

Auditor’s Responsibility Paragraph:

REPPORTS

Answer 1

R = auditors RESPONSIBILITY for
E = EXPRESS an opinion on F/S

Conducted in accordance to GAAS

P = standards require auditor to PLAN and perform to obtain reasonable assurance

Description of the audit that:
P = audit involves PERFORMING procedures to
O = OBTAIN audit evidence
R = assessment of RISKS of M/S
T = TESTS of IC
S = entitiy’s prep and fair pres. of the F/STATEMENTS

Question 2

SHORT VERSION OF REPPORTS

Answer 2

RESPONSIBILITY
EXPRESS
PLAN
PERFORM
OBTAIN
RISKS
TEST
STATEMENTS

Question 3

SHORT VERSION OF CRAME

Answer 3

CONTROL
REASONABLENESS
ACCOUNTING
MANAGEMENT
EVALUATING

Question 4

Under what circumstances would an E.O.M. paragraph be required in auditor’s report?
(4)

Answer 4

1 - Substantial doubt about Going Concern.
2 - Describe justified change in accounting principle
3 - Subsequently discovered facts cause change in audit opinion
4 - F/S prepared in special purpose FW

Question 5

Under what circumstances would an auditor use on other-matter paragraph in an auditor’s report? Short version - 8 things

Answer 5

1. Auditor’s alert in report to restrict use.
2. Subsequent facts that change audit opinion.
3. Predecessor audit report not reissued.
4. Comparative form where current audited F/s are compared to previous reviewed/compiled F/S.
5. Prior to release date management refuses to make revision for material other info inconsistency.
6. Auditor wants/needs to report on supplementary info.
7. Special purpose F/S are prepared according to contractual/regulatory accounting basis which restricts its use.
8. Report includes compliance report.