Opinions

Question 1

If an issuer releases financial statements that purport to present its financial position and results of operations but omits the statement of cash flows, the auditor ordinarily will express a(n)

Answer 1

Qualified opinion.

Question 2

A nonissuer’s unaudited financial statements for the prior period are presented in comparative form with audited financial statements for the subsequent year. If the prior-period statements were reviewed,

1. The report on the unaudited financial statements should be reissued.
2. The report on the audited financial statements should include an other-matter paragraph.

Which one, both or neither is correct?

Answer 2

Either 1 or 2

Question 3

If a group auditor decides to refer to the report of a component auditor, is there an EOM or OM paragraph?

Answer 3

No.

Question 4

When management does not provide reasonable justification for a change in accounting principle, and it presents comparative financial statements, the auditor should express a qualified opinion

Answer 4

Each year that the financial statements initially reflecting the change are presented.