Opinions

Question 1

Emphasis of Matter - Going Concern

Answer 1

Substantial doubt about the entity’s ability to continue as a going concern leads to either an unmodified report with an emphasis-of-matter paragraph or a disclaimer of opinion

Question 2

Supplementary Information

Answer 2

The auditor should apply certain limited procedures to the supplementary information.

Deficiencies in, or the omission of, such information should be reported in a separate emphasis-of-matter paragraph.

Question 3

Prospective Financial Statements

Answer 3

The attestation standard on prospective financial statements requires that the report indicate that the examination was performed in accordance with attestation standards established by the AICPA, not GAAS

Question 4

Subsequent Events

Answer 4

Examples of subsequent events that require disclosure to the financial statements (but should not result in adjustment) are:

1. Sale of a bond or capital stock issue.
2. Purchase of a business.
3. Settlement of litigation when the event giving rise to the claim took place subsequent to the balance-sheet date.
4. Loss of plant or inventories as a result of fire or flood.
5. Losses on receivables resulting from conditions (such as a customer’s major casualty) arising subsequent to the balance-sheet date