Progress Tests 1

Question 1

EOM paragraphs include?

Answer 1

Change of accounting principle, Subsequent events, Sale of a discontinued op, and pro forma effects of a business combmination

Question 2

Comparitive FS include PYs statements that were audited by a “predecessor” auditor whose reports were NOT presented should?

Answer 2

Indicate in an “Other matters paragraph” that the predecessor auditor expressed an unmodified opinion on the PY FS

Question 3

If mgt (of a govt body) declines to present information required by GASB, the auditor should issue?

Answer 3

An unmodified opinion with an “other-matter paragraph”, NOT an adverse opinion

Question 4

If mgt (of a govt body) declines to present information required by GASB, the auditor should issue?

Answer 4

An unmodified opinion with an “other-matter paragraph”, NOT an adverse opinion

Question 5

Procedures for evidence about the occurrence of subsequent events?

Answer 5

Inquire of entity’s legal counsel concerning litigation, claims and assessments arising after YE

Question 6

Auditors requirement for supplementary info, outside of the basic FS, but required by GAAP?

Answer 6

Auditor should apply certain limited procedures, and if necessary ad an “other matter paragraph”.

Question 7

FS contain a material departure from GAAP, but if included would otherwise be misleading, the auditor should render what type of opinion?

Answer 7

unmodified with an “EOM” paragraph

Question 8

What would an auditor most likely perform to obtain evidence about occurrence of subsequent events?

Answer 8

Inquiring as to whether any unusual adjustments were made after YE

Question 9

When a CPA firm decides to take responsibility for another firms audit work, the CPA firm should review the other firms audit workpapers and reperform a subset of audit testing to validate the firms conclusions

Answer 9

The CPA firm would NOT reference the other firms work bc the CPA decided to take responsibility

Question 10

When a CPA firm decides to take responsibility for another firms audit work, the CPA firm should review the other firms audit workpapers and reperform a subset of audit testing to validate the firms conclusions

Answer 10

The CPA firm would NOT reference the other firms work bc the CPA decided to take responsibility

Question 11

The auditor may express an opinion on A/R even if the auditor disclaims an opinion on the complete FSs, provided the report ono A/R is presented “separately” from the disclaimer of opinion on the FSs

Answer 11

n/a

Question 12

In the auditors engagement letter, an understanding with the client should be established regarding mgt’s responsibilities, which include establishing and maintaining effective internal control over financial reporting.

Answer 12

The auditor generally does NOT contact the clients attorney directly, a letteer is sent from management to the lawyer

Question 13

Paragraphs included in Qualified opinion for Nonissuer

Answer 13

Intro
Mgt responsibility
Auditors resp - modified for qualified opinion
"Basis for qualified opinion"
"Qualified Opinion Paragraph"

Question 14

Attribute sampling is used to estimate a “rate of occurance”, and often involves a yes-no question. Attribute sampling could be used to determine the error rate in posting JEs, perhaps by asking “is the entry posted to the proper account”?

Answer 14

And they are used by the auditor to test whether the controls put in place by the client operate effectively

Question 15

Variables sampling is typically used to estimate a “numerical” quantity, such as the amount in an expense account.

Answer 15

Substantive testing, & PPS sampling