Question

Question 45  

• When financial statements contain material misstatements or the absence of a material disclosure required by GAAP, the Auditor will typically:

a	Issue an unqualified opinion
b	Issue a modified opinion
c	Issue a disclaimer of opinion
d	Resign from the audit engagement

Question 46  

• The auditor has a responsibility under both AICPA and PCAOB auditing standards to evaluate whether there is substantial doubt about the client’s ability to continue as a going concern.

True

False

True, but only under the PCAOB auditing standards.

Question 47  

• In an unqualified audit report on financial statements, the auditor states all of the following except:

a	In our opinion, the financial statements present fairly, in all respects, the financial statements of the Company….
b	An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements
c	In our opinion, the financial statements present fairly, in all material respects, the financial statements of the Company….
d	We believe that our audits provide a reasonable basis for our opinion

Question 48  

• There are three (3) situations in which an auditor will issue a “qualified” report. Which of the following is not one of those situations?

a	A material unjustified departure from GAAP (not pervasive).
b	Where there has been a change in accounting principle from one acceptable GAAP method to another acceptable GAAP method
c	Inadequate disclosures (not pervasive).
d	A limitation on the audit scope such that the possible effects on the financial statements of undetected misstatements, if any, could be material

Answer 1

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Answer 45

When financial statements contain material misstatements or the absence of a material disclosure required by GAAP, the Auditor will typically:

Option B

Issue a modified opinion

Answer 46

The auditor has a responsibility under both AICPA and PCAOB auditing standards to evaluate whether there is substantial doubt about the client’s ability to continue as a going concern.

Option C

True, but only under the PCAOB auditing standards.

Answer 47

In an unqualified audit report on financial statements, the auditor states all of the following except:

Option A

In our opinion, the financial statements present fairly, in all respects, the financial statements of the Company.

Answer 48

There are three (3) situations in which an auditor will issue a “qualified” report. Which of the following is not one of those situations?

Option B

Where there has been a change in accounting principle from one acceptable GAAP method to another acceptable GAAP method