AUD 1.6 - Modified Opinions Due To Audit Issues

Question 1

The two modified opinions given for audit issues (GAAS problems) are:

Answer 1

Qualified opinion and disclaimer of opinion

Question 2

Opinion given when an auditor is unable to obtain sufficient appropriate evidence on which to base an opinion and the auditor concludes that the possible effects of any undetected misstatements could be material but not pervasive:

Answer 2

Qualified opinion

Question 3

Opinion given when the unit or is unable to obtain sufficient appropriate audit evidence on which to base an opinion and the auditor concludes that the possible effects of any undetected misstatements could be material and pervasive OR the auditor is not independent or if the financial statements are unaudited:

Answer 3

Disclaimer of opinon

Question 4

If there are scope limitations to the audit, but the auditor performs alternative procedures, what opinion is given?

Answer 4

Unmodified/unqualified opinion

Question 5

If there is a scope limitation and the auditor cannot perform alternative procedures, what opinion should be given?

Answer 5

Either qualified or disclaimer

Question 6

The flow of contents within a qualified opinion due to audit issues audit report for nonissuers:
(GAAS problem, private company)

Answer 6

1. Title & addressee
2. Qualified opinion
3. Basis for qualified opinion
4. Responsibilities of management
5. Responsibilities of auditor
6. Other reporting responsibilities
7. Auditor signature, address, and date of audit report

Question 7

What language is used if a qualified opinion is given within the qualified opinion section of an audit report?

Answer 7

In the auditor’s opinion, except for the possible effects of the matters described in the “basis for qualified opinion” section of the auditors report, the financial statements are fairly presented

Question 8

In what section of a qualified audit report should description of the reasons for the inability to obtain appropriate audit evidence be included?

Answer 8

Basis for qualified opinion section

Question 9

The flow of contents for a disclaimer of opinion due to audit issued auditor report for nonissuers:
(Serious GAAS problem, private company)

Answer 9

1. Title & addressee
2. Disclaimer of opinion
3. Basis for disclaimer of opinion
4. Responsibilities of management
5. Responsibilities of the auditor
6. Other reporting responsibilities
7. Auditor signature, address, and date of audit report

Question 10

What statements are included in the disclaimer of opinion section of an audit report when a disclaimer of opinion is given?

Answer 10

1. That the auditor does not express an opinion
2. Due to the significance of the mattersdescribed in the “basis for disclaimer of opinion” section, the auditor has not been able to obtain sufficient appropriate audit evidence to provide a basis for an opinion
3. “Engaged to audit”

Question 11

The flow of contents for a qualified opinion due to audit issues auditors report for issuers:
(GAAS problem, public company)

Answer 11

1. Opinion section
2. Additional paragraph
3. Basis for opinion section
4. Critical audit matters

Question 12

The flow of contents for a disclaimer of opinion due to audit issues auditors report for issuers:
(Serious GAAS problems, public company)

Answer 12

1. Disclaimer of opinion section
2. Additional paragraph
3. Basis for disclaimer of opinion paragrap

Question 13

Critical audit matters are removed from the auditors report when what opinion is given?

Answer 13

Disclaimer of opinion for issuers (public companies)

Question 14

Key audit matters are removed from the auditors report when what opinion is given?

Answer 14

Disclaimer of opinion for nonissuers (Private companies)