SU 16

Question 1

T or F Changes in accounting estimates do not require an emphasis of matter paragraph.

Answer 1

True

Question 2

Mgmt is responsible for estimating the effects of future events

Answer 2

They can’t get conclusive evidence but they must 1. Estimate future events and if that’s not possible 2. Make required disclosures.

Question 3

Things a predecessor auditor should do before reissuing a report

Answer 3

Read the current financial statements and compare it with the prior statements.

Obtain a representation letter from the current auditor and management.

Question 4

Under PCAOB standards an emphasis of matter paragraph is required T or F

Answer 4

False. It is never required.

Question 5

Emphasis of matter

Answer 5

Reports on special purpose statements require the auditor to add an emphasis of matter paragraph to the report.

Question 6

emphasis of matter

Answer 6

This is not used to draw attention to an audit procedure, only matters presented or disclosed in the FS.