Auditing Chapter 15 Homework

a. No assurance.

b. Materiality assurance.

c. Negative assurance.

d. Positive assurance.

a. The auditor should provide an opinion based on the audit evidence obtained.

b. Auditing standards require auditors to provide positive assurance.

c. The auditor's opinion should state whether the financial statements are presented fairly.

d. All of the above statements are true.

a. The purpose of an audit is achieved when an auditor expresses an opinion on the financial statements.

b. The auditor expresses an opinion as to whether the financial statements are free of material misstatement or states that an opinion cannot be expressed.

c. The purpose of an audit is to enhance the degree of confidence that users can place in the financial statements.

d. The auditor provides positive assurance that the financial statements are free of errors, either intentional or unintentional.

a. "The financial statements referred to above present fairly..."

b. "Nothing came to our attention..."

c. "We have audited...."

d. "An audit includes examining, on a test basis..."

a. A disclaimer of opinion.

b. An adverse opinion.

c. An unqualified opinion with no report modifications.

d. An unqualified opinion with explanatory paragraphs.

a. The nature of the audit opinion formulation process.

b. The auditor's opinion on the fairness of the financial statements.

c. The experience level of the audit team.

d. What was audited and the relative responsibilities of the client and the auditor.

a. Adverse opinion.

b. Consolidated opinion.

c. Qualified opinion.

d. Unqualified opinion with an explanatory paragraph.

a. Unqualified with explanatory language.

b. Disclaimer of opinion.

c. Adverse.

d. Qualified.

a. There is an immaterial dollar misstatement on the financial statements.

b. There is one material departure from GAAP that affects only two accounts.

c. There is a highly material, and very pervasive departure from SFAS No. 141 and No. 142.

d. There is a change in accounting principles promulgated by the FASB.

a. Violations of GAAP.

b. Scope limitations.

c. Going concern.

d. Lack of independence.

e. Either A or B.

a. The timing of the fieldwork.

b. An inadequacy in the accounting records.

c. Emphasis of an important matter.

d. The inability to gather sufficient competent evidence.

a. Violations of GAAP.

b. Scope limitations.

c. Going concern.

d. Lack of independence.

e. Either B or D.

a. Review.

b. Adverse.

c. Unqualified with explanatory language.

d. Disclaimer.

a. There is substantial doubt about the entity's ability to continue as a going concern.

b. Management declines to present earnings per share in the income statement.

c. There is a material dollar misstatement that is pervasive in the financial statements.

d. The client does not allow the auditor to send confirmations to its three largest customers.

a. There is substantial doubt about the entity's ability to continue as a going concern.

b. The financial statements are not in conformity with FASB requirements regarding the capitalization of leases.

c. The client has had significant transactions with related entities that the auditor wants to emphasize.

d. The auditor is not independent.

a. Management declines to provide a statement of cash flows.

b. The auditor is unable to confirm receivables but performs alternative procedures.

c. Management will not sign a management representation letter.

d. The auditor is independent of the client.

a. There are significant misstatements in the financial statements.

b. There is a significant limitation on the scope of the engagement.

c. The auditors are not invited to observe the periodic inventory at year-end.

d. There is insufficient evidence for the auditor to form an opinion on the fairness of the financial statements.

a. A qualified opinion with explanatory paragraph.

b. A disclaimer of opinion.

c. An unqualified opinion.

d. An adverse opinion.

a. Violations of GAAP.

b. Substantial scope limitations.

c. Going concern.

d. Lack of independence.

e. Either B or D.

a. A qualified opinion.

b. A disclaimer of an audit opinion.

c. An adverse opinion.

d. An unqualified audit opinion with an explanatory paragraph.

a. An adverse opinion.

b. A disclaimer of an audit opinion.

c. A qualified audit opinion.

d. An unqualified audit opinion with an explanatory paragraph.

a. The auditor will report this directly to the Treadway Commission.

b. The auditor will either withdraw from the engagement or disclaim an opinion.

c. The auditor will issue an opinion on the ICFR based on another audit firm's work.

d. The auditor will issue an adverse opinion.

a. Notify all parties known to be relying on the report.

b. Contact his or her professional liability insurance carrier.

c. Immediately request the client recall the report.

d. Determine whether the report can still be supported in light of the omitted procedure.

a. Issue a disclaimer of opinion.

b. Automatically decide that the previously issued audit report cannot be supported in light of the omitted procedures.

c. Extend the previous work done on subsequent collections to help determine that the receivables existed and were properly valued at the balance sheet date.

d. Issue an adverse opinion.

a. A scope limitation.

b. A departure from GAAP.

c. An act discreditable.

d. An uncertainty.