Auditing Progress Tests 1-3

Question 1

What modification may happen due to a disclosed significant related party transaction?

Answer 1

Emphasis of Matter paragraph

Question 2

Can you accept an audit of a single financial statement if the rest of the engagement F/S are not being audited?

Answer 2

Yes. you can accept an audit of a single financial statement or as in conjunction with the financial statements and these type of engagements just involve special consideration.

Question 3

What would the accountant LEAST LIKELY be doing during a compilation?

Answer 3

ANALYTICAL PROCEDURES. (He can still omit substantially all disclosures required by GAAP)

Question 4

What does the auditor need to do if they are expressing an opinion on a specific account (A/R) and have issued a disclaimer of opinion on F/S taken as whole?

Answer 4

Report on specific account (A/R) must be presented SEPARATELY and the disclaimer of opinion on the F/S as a whole SHOULD NOT BE REPORTED.

Question 5

What is the WORDING you should use in a Scope Limitated Audit Report Opinion Paragraph?

Answer 5

“The possible effects on the financial statements”

Question 6

What is the definition for negative assurance?

Answer 6

A statement indicating that, as a result of performing certain procedures, nothing came to the accountant’s attention indicating that the subject matter in question did not meet a specified standard.