Question

18. Misstatements must be compared with some measurement base before a decision can be made about materiality. A commonly accepted measurement base includes: net income. total assets. working capital. all of the above. soo 19. a. When a qualified or adverse opinion is issued, the qualifying paragraph is inserted: between the introductory and scope paragraphs. b. between the scope and opinion paragraphs. after the opinion paragraph, as a fourth paragraph. immediately after the address, as the first paragraph. è oo 20. a. Which of the following is not one of the principal CPA firm's alternatives when issuing a report if a different CPA firm performed part of the audit? Issue a joint report signed by both CPA firms. Make no reference to the other CPA firm in the audit report, and issue the standard unqualified opinion. Make reference to the other auditor in the report by using modified wording (a shared opinion or report) A qualified opinion or disclaimer, depending on materiality, is required if the principal auditor is not willing to assume any responsibility for the work of the other auditor. 21. od Soo When the auditor believes a company's financial statements are misleading because they were not prepared in conformity with GAAP, the auditor must issue a(n): qualified opinion. adverse opinion. disclaimer of opinion. qualified or an adverse opinion, depending on materiality. 22. soo For which of the following professional services must CPAs be independent? a. Management advisory services. Audits of financial statements. Preparation of tax returns. All three of the above. To emphasize auditor independence from management, many corporations: a. appoint a partner of the firm conducting the audit to the corporation's audit committee. establish a policy of discouraging social contact between employees of the corporation and the staff of the independent auditor. have the independent auditor report to an audit committee of outside members of the board of directors. request that a representative of the independent auditor be on hand at the annual stockholders' meeting.

Can you answer these questions? Thank you

Answer 1

18. Option d, all of the above[ Common bases include total assets, net income, current assets ,working capital]

19. Option b , between the scope and opinion paragraphs.

20. Option a, Issue a joint report signed by both CPA firms.

21. Option d, qualified or an adverse opinion, depending on materiality [ If the materiality is high then a qualified opinion is issued]

22. Option b ,audit of financial statements [ since they are issued for the public and the rest are done for the company]

23. Option c, Have the independent auditor report to an audit committee of independent members of the board of directors.

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