Audit Report Questions Wrong Answers Flashcards
Only dual date for subsequent events that…
Effect future
When you add income statement with retained earnings, you have to add…
Statement of cashflows
Can’t give disclaimer when auditor knows that management…
Committed an illegal act
When management’s illegal acts haven’t been properly accounted for or disclosed, what is that?
It’s a GAAP problem
When you can’t read the minutes or you can’t contact the client’s lawyers, there may be…
A massive lawsuit that could make the company bankrupt
So disclaim
You can give an unqualified opinion in he balance sheet taken as a whole but in some cases…
Must disclaim on income statement as a whole
Opening inventory
Beginning inventory
Beginning inventory (opening inventory) affects…
Cost of goods sold which affects opinion on income statement
When the auditor disclaims an opinion on financial statements taken as a whole it is inappropriate for an auditor’s report to include a statement that current asset portion of the entity’s balance Sheet was fairly stated because…
It may overshadow auditor’s disclaimer of opinion
Auditor’s are not prohibited in reporting on…
One basic financial statement as a whole
It’s not required to mention “if material in the future” because…
You’re auditing the current period
An auditor should report on all the accompanying information included in the document if it’s info from…
Auditor submitted document (because auditor associated with
Info)
Don’t add additional paragraph unless supplementary info is…
Inconsistent with financial statements
Minimum requirement of auditor dealing with supplementary info is to…
Read other info to determine that it is consistent with audited
Financial statements
The auditor should apply certain limited procedures to required supplementary info and…
Report deficiencies in or omissions of such info
