Question

8 10. T, F. Attribute sampling is the most preferred sampling method 11. T, F. Data analytics has made sampling and professional judgment 12. T, F. An auditor should provide an opinion on the financial 13. T, F. Standards on audit reporting are currently in a state of chan used by auditors evpecia with respect to account balances and transactions. with respect to sampling statements only if the opinion obsolete material respectpi indicates that the financial statements are fairly stated in all mat e because both PCADB and IAAS8 have issued proposed standards that could fundamentally change reporting in the near future. the auditor can choose between an unqualified and qualified opinion. opinion and a disclaimer opinion. 14. T, F. When the financial statements being audited contain justified departure from 15. T, F. When an auditor lacks independence, the auditor can choose between an adverse GAAP PART Il: SHORT CASES ( 60 POINTS) You are an auditor of a multi-national company, MNO CORPORATION, with Head Quarters in New York City, USA. The Company is in Oil and Gas Prospecting and Refining Industry. Your audit reveals that their books were well kept and their oil fields were in deep waters of The Atlantic Ocean. You tried to verify these oilfields but the Company failed to provide support. When you examined their Balance Sheet, they failed to indicate their oil reserves and locations. In addition, their financial statements were not presented in accordance with Accounting Standards for the UPSTREAM and DOWNSTREAM GAAP Standards. 1. Required Provide the opinion Section of the Auditor's report for use by a bank trying to loan $800m. What type of audit opinion will you provide? a. Provide a Draft Sample of your Audit Opinion below. Opinion should not exceed 8 sentences b.

Answer 1

a) The auditor shall express a qualified opinion when

1. The auditor having obtained sufficient appropriate audit evidences, concludes that misstatements, individually or in aggregate, are material, but not pervasive to the financial statements, or
2. The auditor is unable to obtain sufficient appropriate audit evidences on which to base the opinion, but the auditor concludes that the possible effects on the financial statements of undetected misstatements, if any, could be material but not pervasive.

In the given case the auditor was unable to verify the oilfields, and most importantly their financial statements were not presented in accordance with Accounting Standards for the Upstream and downstream GAAP standards, therefore the auditor will provide qualified opinion.

b) Draft sample of audit opinion :-

We have audited the financial statements of MNO Corporation ("the company") which comprise the balance sheet as at March 31, 20XX, and the statement of profit or loss, statement of changes in equity, statement of cash flows for the year ended and notes to the financial statement, including a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the basis for qualified opinion section of our report, the aforesaid financial statements give a true and fair view in conformity with the accounting principles generally accepted.