Audit Reports

Question 1

When adding an alert to restrict the auditor’s report, the auditor should place the alert

A. In the introductory paragraph of the auditor’s report.
B. In the Auditor’s Responsibility section of the auditor’s report.
C. In a paragraph preceding the opinion paragraph.
D. In a paragraph at the end of the auditor’s report.

Answer 1

D. In a paragraph at the end of the auditor’s report.

The alert to restrict the distribution of the auditor’s report is presented at the end of the auditor’s report.

Question 2

Green, CPA, is aware that Green’s name is to be included in the interim report of National Company, a publicly held entity. National’s quarterly financial statements are contained in the interim report.
Green has not audited or reviewed these interim financial statements.
Green should request that

I. Green’s name not be included in the communication.
II. The financial statements be marked as unaudited with a notation that no opinion is expressed on them.

A. I only.
B. II only.
C. Both I and II.
D. Either I or II.

Answer 2

D. Either I or II.
When an accountant is associated with the financial statements of a public entity and has not audited or reviewed such statements, the accountant must either request that his/her name not be included in the communication or mark the financial statements as unaudited and include an accompanying disclaimer separately or on each statement.