Unit 1

Question 1

What is the earliest an Audit Report can be dated?

Answer 1

When we have sufficient, appropriate evidence.

Question 2

Which paragraph refers to GAAP and which paragraph refers to GAAS in the Audit Report?

Answer 2

GAAP = Auditor's Responsibility
GAAS = Opinion

Question 3

If an auditor’s proposed adjustments for immaterial changes are ignored or refused, the auditor (can/cannot) issue an unmodified opinion.

Answer 3

CAN

Question 4

What information is presented in the “Basis for Opinion” paragraph?

Answer 4

Substantive reasons for F/S being misleading

Question 5

What information is presented in the “Opinion” paragraph?

Answer 5

“Because of the reasons listed in basis, it is our opinion that…”

Question 6

When is the Auditor’s Responsibility paragraph modified?

Answer 6

If an opinion is qualified or worse.

Question 7

Scope limitations results in what kind of opinion?

Answer 7

Qualified or disclaimer of opinion

Question 8

Lack of independence in an audit results in what kind of opinion?

Answer 8

It is always a disclaimer

Question 9

When is the Introductory paragraph modified?

Answer 9

ONLY if there is a disclaimer

Question 10

Qualified opinions when it comes to scope limitations refer to…. not….

Answer 10

“The POSSIBLE effects on the F/S” NOT “the scope imitation itself”

Question 11

Going concerns are reported in which paragraph for a nonissuer?

Answer 11

EOM

Question 12

Consistency is (explicit/implied) on the Auditor’s Report

Answer 12

Implied

Question 13

If an entity changes its method of accounting, it should be disclosed in the _____ paragraph. It is only necessary to disclose of it if it is a _______ change.

Answer 13

“EOM” paragraph

“material” change

Question 14

Predecessor auditors should obtain letters of representation from _________ and ___________

Answer 14

1. Successor independent auditor

2. Client’s management

Question 15

What is dual dating used for?

Answer 15

Subsequent events that require an extension of responsibility, NOT for comparative F/S. It is limited to one specific event

Question 16

When it comes to supplementary information required by FASB, the auditor’s responsibility lies in applying _______ procedures and add an _____ paragraph.

Answer 16

“limited” and “EOM”

Question 17

If the financials were made by a basis other than GAAP, the auditors report (does/does not) need to explain why it was used. And a description of the other basis should be found in the _______.

Answer 17

DOESNT

Notes to F/S