Reporting

Question 1

When an accountant issues to an underwriter a comfort letter containing comments on data that have not been audited, the underwriter most likely will receive

Answer 1

Negative assurance on capsule information

Question 2

FIFO for international & LIFO for domestic results in what type of opinion?

Answer 2

Unmodified Opinion

Question 3

Concerning Engagement to Apply agreed upon procedures

Answer 3

Use of the report is restricted to the specified users.

Question 4

If auditor wishes to point out in report that the entity has sufficient transactions with related parties should disclose this fact in

Answer 4

An emphasis-of-matter paragraph to the auditor’s report.

Question 5

An auditor’s report on financial statements that are prepared in accordance with a special purpose financial reporting framework should preferably include

Answer 5

An opinion as to whether the use of the disclosed method is appropriate.

Question 6

When qualifying an opinion because of an insufficiency of audit evidence, an auditor should refer to the situation in the

Answer 6

Scope paragraph

Question 7

When there has been a change in accounting principles, but the effect of the change on the comparability of the financial statements is not material, the auditor should

Answer 7

Not refer to consistency in the auditor’s report.

This would result in an unmodified opinion

Question 8

When the auditor is unable to determine the amounts associated with the illegal acts of client personnel because of an inability to obtain sufficient appropriate audit evidence, the auditor should issue a(n

Answer 8

Disclaimer of opinion.

Question 9

When performing an audit of a city that is subject to the requirements of the Uniform Single Audit Act of 1984, an auditor should adhere to

Answer 9

General Accounting Office Standards for Audit of Governmental Organizations, Programs, Activities, and Functions

Question 10

An auditor concludes that there is substantial doubt about an entity’s ability to continue as a going concern for a reasonable period of time. If the entity’s disclosures concerning this matter are adequate, the audit report may include a(n)

Answer 10

Disclaimer of Opinion

Question 11

What is an auditor’s responsibility for supplementary information, such as disclosure of pension information, which is outside the basic financial statements but required by the GASB?

Answer 11

an auditor applies limited procedures and reports deficiencies or omission of such information; note that while deficiencies are reported in the audit report, the opinion is not modified since the information is considered unaudited.

Question 12

What is the objective of interim financial information?

Answer 12

To provide the CPA with a basis of reporting whether material modifications should be made to the info to make it conform to GAAP.

Question 13

If an auditor’s examination reveals a misstatement in segment info that is material in relation to the F/S taken as whole. (Segment 50%) & client refuses to make the modification

Answer 13

like other departures from GAAP, This matter leads to either a qualified opinion or an adverse opinion

Question 14

An auditor may report on summary financial statements that are derived from a complete set of audited financial statements only if the auditor

Answer 14

Only if the auditor indicates that the information is fairly stated in all material respects in relation to the complete F/S

Question 15

If client has material weaknesses, and auditor issues an adverse opinion. Client may include their reasons for why they can’t correct the material weaknesses and the Auditor should

Answer 15

Not express any opinion as to management’s statement.

Question 16

If Auditor restates prior period F/S that were issued a qualified opinion . When issuing the report the auditor should

Answer 16

express an unmodified opinion on the restated F/S

Question 17

When included with historic F/S this info is considered unaudited

Answer 17

Interim Information

Question 18

What is the job of a continuing auditor when it comes to comparative bases for prior period F/S to current period’s F/S?

Answer 18

Update the report on the previous F/S regardless of the opinion previously issued.

Question 19

When performing an audit of a city that us subject to the reqs of the Uniform Single Audit Act of 1984, an auditor should adhere to

Answer 19

General Accounting Office Standards for Audit of Governmental Organizations, Programs, Activities, and Functions.

Question 20

GAS differs from GAAS in that GAS requires the Auditor to:

Answer 20

Present the results of the auditor’s tests of controls

Question 21

When the report of a group auditor makes reference to the examination made by another auditor, the other auditor may be named if express permission to do so is given and

Answer 21

If the report is presented together with the group auditor

Question 22

Which of the following will result in an emphasis-of-matter paragraph as to consistency in the auditor’s report, when that the item is fully disclosed in the financial statements?

Answer 22

A change from an unacceptable accounting principle to a generally accepted one.

Question 23

A material change in accounting estimate affects comparability

Answer 23

This requires disclosure in the F/S but does not require a consistency modification in the auditor’s report

Question 24

In an Audit accordance with GAS when it comes to assurrance

Answer 24

The audit must be designed to provide reasonable assurance that
-the F/S are free from material misstatements
resulting from violation of laws & regs that have a direct material effect on the determination of F/S amounts.

Question 25

When it comes to reissuing a prior period report due to a departure from GAAP, 3 things must be be disclosed in the other matter paragraph to the

Answer 25

1) Date of the audiotr’s previous report
2) the type of opinion previously expressed
3) the circumstances or events that caused the auditor to express a different opinion, and
4) that the updated opinion differs from the previousl opinion.

Question 26

What is the Auditor’s responsibility when it comes to other information?

Answer 26

the Professional Standards require that an auditor read the “other information” to determine whether it is inconsistent with the financial statements.

Question 27

An Auditor may report on summary F/S that are derived from a complete set of financial statements only if the auditor

Answer 27

Indicates whether or not the information is fairly stated in all material respects in relation to the complete F/S

Question 28

When the entity has sufficient related party transactions the auditor should mention this fact in what portion of the report

Answer 28

Emphasis of matter paragraph

Question 29

Which of the following items should be included in prospective financial statements issued in an attestation engagement performed in accordance with Statements on Standards for Attestation Engagements?

Answer 29

All significant assumptions used to prepare the F/S

Question 30

To exercise due professional care an auditor should

Answer 30

Critically review the judgment exercised by those assisting in the audit.

Question 31

Before reissuing the prior year’s auditor’s report on the financial statements of a former client, the predecessor auditor should obtain letters of representation from the

Answer 31

Successor Auditor & the client

‘s management.

Question 32

When a predecessor auditor’s report is not presented, the successor auditor should indicate the following items:

Answer 32

That the statements were audited by a predecessor auditor. The predecessor auditors should not be named unless the practice of the predecessors was acquired by or merged with that of the successor.

The type of opinion expressed by the predecessor auditor and, if the opinion was modified, the reason for the modification.

The nature of any emphasis-of-matter or other-matter paragraph included in the predecessor auditor's report.

The date of the predecessor auditor's report.

Question 33

When an auditor expresses an adverse opinion, the opinion paragraph should include

Answer 33

The substantive reasons for the financial statements being misleading.

Question 34

Which of the following circumstances would permit an independent auditor to accept an engagement after the close of the fiscal year?

Answer 34

Remedy of limitations resulting from accepting the engagement after the close of the end of the year, such as those relating to the existence of physical inventory.

Question 35

What procedure would an auditor least likely perform before the balance sheet date?

Answer 35

Confirmation of A/P

you do not have the entire balance, only a portion

Question 36

financial projections are appropriate for what type of use?

Answer 36

Limited Use

Question 37

financial forecasts are appropriate for what type of use?

Answer 37

General use

Question 38

A scope limitation sufficient to preclude an unmodified opinion always will result when management:

Answer 38

Refuses to acknowledge its responsibility for the fair presentation of the financial statements in conformity with GAAP.

Question 39

An auditor should disclose the substantive reasons for expressing an adverse opinion in a basis for modification paragraph:

Answer 39

Preceding the opinion paragraph., In basis for adverse opinion

Question 40

Financial Projection is appropriate and can be used for

Answer 40

Limited Use Only

Question 41

Financial Forecasts are appropriate for both

Answer 41

General use & limited use

Question 42

Documentation Completion date for PCAOB following the report

Answer 42

45 Days following the report

Question 43

Documentation Completion date for AICPA, non-issuer following the report

Answer 43

60 days following the report