1) In general what two scenarios would require the auditor to modify their audit opinion? Does...
1) In general what two scenarios would require the auditor to modify their audit opinion? Does this change based on the severity of the circumstance?
Homework Answers
1) IN GENERAL WHAT TWO SCENARIOS WOULD REQUIRE THE AUDITOR TO MODIFY THEIR AUDIT OPTIONS? DOES THIS CHANGE BASED ON THE SEVERITY OF THE CIRCUMSTANCES?
A) When an auditor is able to satisfactorily conclude that the financial statements are free from material mismanagement they express an unmodified opinion.The compete form and content of the unmodified opinion are presented in ISA 700.FORMING AN OPINION AND REPORTING ON FINANCIAL STATEMENTS,however,auditors typically use one of two well known phrases to reflect their conclusions,either The financial statements present fairly in all the material respects or The financial statements give a true and fair view.There are two circumstances when the auditor may choose not to issue an unmodified opinion.
a) when the financial statements are not free form material misstatement or
b)when they have been unable to obtain sufficient appropriate evidence
In this circumstances the auditor has to issue a modified version of their opinion there are three types of modification.Their use depends upon the nature an severity of the matter under consideration they are
1) The qualified opinion
2) The adverse opinion
3) The disclaimer opinion.
Add Answer to:
1) In general what two scenarios would require
the auditor to modify their audit opinion? Does...
, what two scenarios would require the auditor to modify their audit opinion? Does this change...
, what two scenarios would require the auditor to modify their audit opinion? Does this change based on the severity of the circumstance?
An auditor would not render an opinion on a(an): Financial audit of financial statements. Performance audit....
An auditor would not render an opinion on a(an): Financial audit of financial statements. Performance audit. Audit to determine whether a governmental department's financial information complies with specific state regulatory requirements. Audit to determine whether the entity has adhered to specific compliance requirements applicable to a major program.
What is the purpose of a disclaimer of opinion? In what situations would an auditor issue...
What is the purpose of a disclaimer of opinion? In what situations would an auditor issue a disclaimer of opinion? Why should the auditor ordinarily disclaim an opinion if the client imposes significant scope limitations on the audit procedures?
Match each statement below with the type of audit opinion/report that would most likely be issued...
Match each statement below with the type of audit opinion/report that would most likely be issued in the circumstance. Answer choices may be used once, multiple times, or not at all. （1）The auditors determined that sufficient appropriate evidence could not be obtained because inventory records were destroyed in a fire. （2）The client failed to write down certain assets that it determined were impaired. The reasons for reporting the assets at cost instead were disclosed in the notes to the financial...
A manager is explaining to a staff auditor how various situations might affect the audit opinion....
A manager is explaining to a staff auditor how various situations might affect the audit opinion. For each of the following scenarios, identify the appropriate reporting option by matching the scenario with the opinion type from the list provided. Assume that any financial statement effect is material, unless otherwise noted and that US auditing standards are followed. -A.B.C.D. The scope of the auditor’s examination is affected by conditions that preclude the application of a necessary auditing procedure it IS very...
Indicate which changes would require an explanatory paragraph in the audit report. O A. Changes in...
Indicate which changes would require an explanatory paragraph in the audit report. O A. Changes in reporting entities, such as the inclusion of an additional company in the combined financial statements Yes The CPA makes reference to the work of another auditor to indicate shared responsibility in an unqualified opinion. No OB. Changes in reporting entities, The CPA makes reference to the such as the inclusion of an work of another auditor to additional company in the indicate shared responsibility...
Which of the following would not require a departure from an unqualified opinion? Question 1 Which...
Which of the following would not require a departure from an
unqualified opinion?
Question 1 Which of the following would not require a departure from an unqualified opinion? Selected Answer: Statement of cash flows not included Answers: Statements are not in conformity with GAAP. Scope limitation. Statement of cash flows not included Related party transactions. Question 2 Which of the following is false regarding materiality and the audit opinion? Selected Answer: The level of materiality is mathematically calculated and therefore...
Ch.1 Discussion How would you audit the automobile revenues (say $100 billion) of General Motors? Let's...
Ch.1 Discussion How would you audit the automobile revenues (say $100 billion) of General Motors? Let's say that each car and truck has an invoice on the window and in GM's computer system, and that 8 million cars and trucks were sold. Then, how many invoices out of 8 million should you want to examine (audit) in order to verify the $100 billion of revenues in the financial statements? So, you, as the auditor, would feel comfortable" to sign the...
What type(s) of audit opinion(s) must an auditor issue when the client's financial statements are materially and pervas...
What type(s) of audit opinion(s) must an auditor issue when the client's financial statements are materially and pervasively misstated? O Qualified: yes | Adverse: yes O Qualified: yes | Adverse: no O Qualified: no | Adverse: no O Qualified: no | Adverse: yes
Multiple Choice Questions!! Please choose the correct answers wisely. 1) During the audit the independent auditor...
Multiple Choice Questions!! Please choose the correct answers wisely. 1) During the audit the independent auditor identified the existence of a weakness in the client's internal control and communicated this finding in writing to the client's senior management and those charged with governance. The auditor should : a) Consider the weakness a scope limitation and therefore disclaim an opinion. b) Suspend all audit activities pending directions from the client's audit committee. c) Withdraw from the engagement. d) Consider the effects...
Indicate which changes would require an explanatory paragraph in the audit report. O A. Changes in reporting entities, such as the inclusion of an additional company in the combined financial statements Yes The CPA makes reference to the work of another auditor to indicate shared responsibility in an unqualified opinion. No OB. Changes in reporting entities, The CPA makes reference to the such as the inclusion of an work of another auditor to additional company in the indicate shared responsibility...
Which of the following would not require a departure from an
unqualified opinion?
Question 1 Which of the following would not require a departure from an unqualified opinion? Selected Answer: Statement of cash flows not included Answers: Statements are not in conformity with GAAP. Scope limitation. Statement of cash flows not included Related party transactions. Question 2 Which of the following is false regarding materiality and the audit opinion? Selected Answer: The level of materiality is mathematically calculated and therefore...
Ch.1 Discussion How would you audit the automobile revenues (say $100 billion) of General Motors? Let's say that each car and truck has an invoice on the window and in GM's computer system, and that 8 million cars and trucks were sold. Then, how many invoices out of 8 million should you want to examine (audit) in order to verify the $100 billion of revenues in the financial statements? So, you, as the auditor, would feel comfortable" to sign the...
What type(s) of audit opinion(s) must an auditor issue when the client's financial statements are materially and pervasively misstated? O Qualified: yes | Adverse: yes O Qualified: yes | Adverse: no O Qualified: no | Adverse: no O Qualified: no | Adverse: yes
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