No. |
Part A |
Part B |
Part C |
1 |
Substantial doubt about going concern |
Material |
Unmodified opinion—explanatory paragraph |
2 |
Failure to follow GAAP |
Material |
Qualified opinion only—GAAP departure |
Highly material |
Adverse |
||
3 |
Existence of significant potential rewards |
None |
Unmodified opinion—standard wording |
4 |
Change in accounting principle |
Immaterial |
Unmodified opinion—standard wording |
5 |
Not applicable |
None |
Unmodified opinion—nonstandard report wording |
6 |
Scope of the audit has been restricted |
Material |
Unmodified—standard wording |
Highly material |
|||
7 |
Report involving other auditors |
Material |
Unmodified— nonstandard report wording |
Part 1
An explanatory paragraph to the unmodified opinion is added due to substantial doubt about the business continuation
Part 2
If reduce the value of the inventory is not reduced for a decline in value then it is a departure from GAAP
Part 3
No indication that questions the ability of the business to continue operations exists.
Part 4
The change in accounting principle is immaterial and therefore there is no need for disclosure .
Part 5
According U.S. auditing standards, it is possible to conduct audit according to U.S. GAAP and ISAs. The auditor’s responsibility paragraph is modified to state the conduct of audit in accordance with both standards.
Part 6
Initially the scope of audit being restricted, it as possible to auditor to satisfy himself using different methods.
Part 7
It is shared audit report hereby auditor comes to know about the duty performed by other auditors stated in the auditor’s responsibility paragraph. It can issue an unmodified opinion. Assets and revenues should be stated either in absolute dollar amounts or percentages.
sued. If you lave no ate report for each alternative materiality level. 3-26 (OBJECTIVES 3-4,3-5,3-6, 3-7,...
In-cla the appropriate report for each alternative materiality level): (1) Unmodified opinion-standard wording Unmodified opinion explanatory paragraph 3 Unmodified opinion-nonstandard report wording 14) Qualified opinion GAAP departure 15) Qualified opinion-scope limitation (6) Disclaimer (7) Adverse 3-26 (OBJECT 16 CONIECTIVES J-4,3-5, 3-6, 3-7, 3-8) For the following independent situations, assume that you are the audit partner on the engagement: 1. A number of frozen yogurt stores have opened in the last few years and your client, Discus Yogurtland, has experienced a...
3-26 (OBJECTIVES 3-4,3-5,3-6, 3-7, 3-8) For the following independent situations, assume than you are the audit partner on the engagement: 1. A number of frozen yogurt stores have opened in the last few years and your client. Yogurt Land, has experienced a noticeable decline in customer traffic over the past several months that has caused you to have substantial doubt about Yogurt Land's ability to continue as a going concern. 2. Intelligis Electronics is a manufacturer of advanced electrical components....
For the following independent situations, assume that you are the audit partner on the engagement: A number of frozen yogurt stores have opened in the last few years and your client, YogurtLand, has experienced a noticeable decline in customer traffic over the past several months that has caused you to have substantial doubt about YogurtLand’s ability to continue as a going concern. Intelligis Electronics is a manufacturer of advanced electrical components. During the year, changes in the market resulted in...
A number of frozen yogurt stores have opened in the last few years and your client, YogurtLand, has experienced a noticeable decline in customer traffic over the past several months that has caused you to have substantial doubt about YogurtLand’s ability to continue as a going concern. Intelligis Electronics is a manufacturer of advanced electrical components. During the year, changes in the market resulted in a significant decrease in the demand for their products, which are now being sold significantly...
The following are independent situations for which you will recommend an appropriate audit report Subsequent to the date of the financial statements as part of his post-balance sheet date audit procedures, a CPA learned that a recent fire caused heavy damage to one of a client's two plants; the loss will not be reimbursed by insurance. The newspapers described the event in detail. The financial statements and footnotes as prepared by the client did not disclose the loss caused by...
3-25 (OBJECTIVES 3-4, 3-5, 3-6, 3-7, 3-8) For the following independent situations, assume that you are the audit partner on the engagement: 1. Auto Delivery Company has a fleet of several delivery trucks. In the past, Auto Delivery had followed the policy of purchasing all equipment. In the current year, they decided to lease the trucks. The method of accounting for the trucks is therefore changed to lease capitalization. This change in policy is fully disclosed in footnotes. 2. You...
12 UM LapurdULY 13) Unmodified opinion-nonstandard report limitation wording (6) Disclaimer (4) Qualified opinion only GAAP departure (7) Adverse" 2.27 (OBJECTIVES 3-4, 3-5, 3-6, 3-7, 3-6) The following are independent situations for which ou will recommend an appropriate audit report: 1. Subsequent to the date of the financial statements as part of his post-balance sheet date audit procedures, a CPA learned that a recent fire caused heavy damage to one of a client's two plants; the loss will not be...
Requirements: Identify which of the conditions requiring a deviation from a standard unmodified opinion audit report is applicable, if any. Then, state the level of materiality as immaterial, material, or highly material. If you cannot decide the level of materiality, state the additional information needed to make a decision. (If a box is not used in the table leave the box empty; do not select a label.) For each situation, do the following: a. Identify which of the conditions requiring...
Assume that you are the audit partner on the engagement. During the audit at A company, the client prevented you from being able to observe the counting of fixed asset. The fixed asset amount is material in the client's financial statements. But, you were able to perform alternative procedures to support the existence and valuation of fixed assets at the year end 1. Identify which of the condition requiring a deviation from a standard unmodified opinion audit report is applicable,...
Please answer: What are the Material Level, the Additional Information, and the auditing report of 6 situations below 1) Auto Delivery Company has a fleet of several delivery trucks. In the past, Auto Delivery had followed the policy of purchasing all equipment. In the current year, they decided to lease the trucks. The method of accounting for the trucks is therefore changed to lease capitalization. This change in policy is fully disclosed in footnotes. Given condition is "No conditions are...