Question

The auditor's responsibility section of the standard audit report states that the auditor is (15 A) responsible for the financial statements and the opinion on them B) responsible for the financial statements C) responsible for the opinion on the financial statements .D) jointly responsible for the financial statements with management If the balance sheet of a private company is dated December 31, 2011, the audit report is dated February (16 8, 2012, and both are released on February 15, 2012, this indicates that the auditor has searched for subsequent events that occurred up to A) December 31, 2011 B) January 1, 2012 C) February 8, 2012 D) February 15, 2012 17) The appropriate audit report date for a standard nonqualified audit report for a non-public entity should be the: the A) date the financial statements are given to the Board of Directors. B) date of the financial statements C) date the auditor completed the auditing procedures in the field. D) 60 days after the date of the financial statements as required by the SEC. 18) The standard unqualified audit report: A) is sometimes called a clean opinion. B) can be issued only with an explanatory paragraph. C) can be issued if only a balance sheet and income statement are included in the financial statements. D) is sometimes called a disclaimer report. P (19 Examples of unqualified opinions which contain modified wording (without adding an explanatory paragraph) include A) the use of other auditors B) material uncertainties C) substantial doubt about the audited company (or the entity) continuing as a going concern .D) lack of consistent application of GAAP s 20) Which of the following is least likely to cause uncertainty about the ability of an entity to continue as a O going concern? A) The entity is suing a competitor for a minor patent infringement. B) The entity has lost a major customer. C) The entity has significant recurring operating losses. D) The entity has working capital deficiencies. 21) When a company's financial statements contain a departure from GAAP with which the auditor concurs, t the departure should be explained in: A) the scope paragraph. B) an explanatory paragraph that appears before the opinion paragraph. C) the opinion paragraph. D) an explanatory paragraph after the opinion paragraph. 5 Page

Answer 1

1. Auditor is only responsible for the opinion given on the financial statements. Management is responsible for the preparation of financial statements. Therefore, option C is the right answer.

2. Option D is the correct answer. Even though the auditor's report is dated February 8th, 2012, the subsequent events occurred up to the issuance date should be considered and reported or adjusted.

3. Option C is the correct answer.

4. Option A is the correct answer.

5. Option D is the correct answer.

6. Option A is the correct answer.

7. Option D is the correct answer.