Audit 1 Module 8 - Reporting With Diggerent Opinions & Other Auditors

Question 1

When prior year fs were not audited and the current year is being audited, the auditor is facing a scope limitation. Therefore

Answer 1

Disclaimer of opinion on statements of income, retained earnings and cash flows may be required

Question 2

If the updated opinion differs from the previous opinion the auditors should disclose the reasons in an emphasis of matter or other matter paragraph (nonissuer) or explanatory (issuer) paragraph which should disclose the following (DORCS)

Answer 2

Date of auditors previous report
Opinion type previously issued
Reason for prior opinion
Changed that have occurred
Statement (that the opinion is different)

Question 3

When reporting on compared to financial statements and auditor ordinarily should change the previously issued opinion on the prior year’s financial statements if the

Answer 3

Prior years financial statements are restated following a change in reporting entity in the current year

Question 4

Compared to financial statements include the prior years statements that were audited by a predecessor auditor whose report is not presented. If the predecessors report was unmodified the successor should indicate in an ______ paragraph that the predecessor auditor expressed a _______ opinion on the prior years financial statements

Answer 4

Other matter
Unmodified

Question 5

A component auditor is an auditor who performs work on the financial information of a component that will be used as audit evidence for the group audit

Answer 5

They may be part of the group engagement partners firm, a network firm, or another firm

Question 6

If the component auditor is not independent in the group engagement team

Answer 6

Should not use the work of the component auditor Or make reference to the component auditor in the auditors report

Question 7

Significant components is a component that is of individual financial significance to the group or is likely to include significant risk of material misstatement of the group financial statements. It can be significant due to two things

Answer 7

1. Due to individual financial significance
2. Due to significant risks of material misstatement

Question 8

If the group auditor decides not to refer to the component auditor who ordered it a subsidiary of the group auditors client the group auditor would most likely

Answer 8

Document in the engagement letter that the group auditor assumes no responsibility for the component auditors work and opinion