study audit Flashcards
If an accounting change does not have a material effect on the FS of the current year, but the change is certain to have material effect in later year, the change should be
it will be disclosed in the notes to the FS for the current year
Since there is no material effect in the current year, no modification to the auditor’s report is required.
When the group engagement auditor accepts responsibility for the work performed by a component auditor
the group engagement partner must contact the component auditor and review the audit program and working papers pertaining to the component
When the group engagement partner finds it impractical to review the component auditor’s work, or when the FS audited by the other auditor are material
it is more likely that the group engagement partner will divide responsibility and make reference to the component auditor.
The auditor’s report would not need to be modified when the effect of the change on comparability is immaterial
therefore, the auditor does not need to refer to the note in the financial statements that discusses the change.
during an audit, the auditor notes that the client’s F.S are not in conformity with GAAP regarding the recording of lease. Which option is least likely to be rendered?
A disclaimer of opinion is issued when there is a significant scope limitation, when the auditor is not independent, or when the financial statements are not audited, which is not the case in this question
When the group auditor decides not to make reference to the audit of a component auditor,
the group auditor assumes responsibility for the work of the component auditor and should determine the type of work to be performed on the financial information of the component. If the component is significant, the component should be audited by the group engagement team or the component auditor
what would an auditor most likely to perform to obtain evidence about the occurrence of subsequence events?
inquiring as to whether any unusual adjustments were made after year-end
what factors should an auditor consider most important upon subsequent discovery of facts that existed at the date of the audit report and would have affected the report?
the client’s willingness to issue revised financial statements or other disclosures to persons known to be relying on the financial statement
what auditors do with supplementary information which is outside the basic financial statements, but required by GAAP
The auditor would not perform a review or express negative assurance
The auditor may express an opinion on the information, if he or she has been engaged to examine it.
Chi cho y kien, danh gia, ko co audit
After the date of F.S, changes in capital stock that was issued or repurchased would represent a transaction that may require
disclosure
When an auditor expresses an Adverse opinion, the Opinion section should include
a direct reference to a separate section disclosing the basis for the opinion.
Chi qua tham khao Basis for the opinion
The opinion paragraph in an adverse opinion should state that, in the auditor’s opinion, because of the significance of the matter(s) discussed in the Basis for Adverse Opinion section, the accompanying consolidated financial statements do not present fairly…
A qualified opinion phrase is
“In our opinion, except for [reference to matter giving rise to qualification] described in the Basis for Qualification section of our report.
A qualified opinion due to a scope limitation and a qualified opinion due to a GAAP departure require modifications to
both the Opinion section and the Basis for Opinion section of the auditor’s report.
A material related party transaction has occurred and has been accounted for appropriately, but it has not been adequately disclosed in the F.S
would result in a qualified or adverse opinion.
A scope limitation sufficient to preclude an unmodified opinion always will results when
Management’s refusal to accept responsibility for the fair presentation of the financial statements in conformity with GAAP
