All of the following are causes for the addition of an explanatory paragraph except for: Select one: a. auditor agrees with a departure from promulgated accounting principles. b. lack of consistent application of generally accepted accounting principles c. reports involving other auditors. d. emphasis of a matter

All of the following are causes for the addition of an explanatory paragraph except for: Select one: a. auditor agrees with a departure from promulgated accounting principles. b. lack of consistent application of generally accepted accounting principles c. reports involving other auditors. d. emphasis of a matter

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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85 Which of the following circumstances requires the modification of both the auditor’s responsibility, and the auditor’s opinion paragraphs of the auditor’s report? Group of answer choices Limitation on the scope of audit that results to qualified opinion. Auditor’s disagreement with the client management on accounting policies that requires qualified opinion. Inadequate disclosures that requires qualified opinion. Disagreement with the client management regarding accounting policies that requires adverse opinion.
Which of the following factors are to be considered by the auditor to express a modified audit opinion? 1. Whether the financial statements are materially misstated. 2. Inability to obtain sufficient appropriate audit evidence. 3. Auditor's Judgement about the possible effects of the matter. 1 only 3 only 1,2& 3 1&2 only. As per ISA 570, Who of the following is responsible for assessing the entity going concern assumption? A Auciting ah EN
2. Consider the following statements: I. Inconsistent application of accounting principles (i.e. a change in accounting principle, which the auditor agrees is acceptable) would result in a unqualified audit opinion. II. For a change in accounting principles that management does NOT justify to the auditor, the auditor will likely issue a Disclaimer of an audit opinion. a. Tis true; Il is true b. Iis true; Il is false c. I is false; Il is true d. I is false; II is false
An opinion based in part on the report of another auditor requires a modified wording in the standard unqualified audit report. True O False
Disclaimer of opinion rendered by an independent auditor of financial statements stating that the financial statements have been presented fairly in accordance with GAAP. True False
What type of opinion is issued by the auditor on the financial statements when there is some limitation on the scope of the audit or when one or more items in the financial statements are not presented in accordance with applicable accounting principles?
Distinguish between operating mergers and financial mergers.
On October 1, 2021, Oberley Corporation loans one of its employees $25,000 and accepts a 12-month, 8% note receivable. Calculate the amount of interest revenue Oberley will recognize in 2021 and 2022. Interest Year Revenue 2021 2022
For which of the following events would an auditor issue a report that does not make any reference to consistency Select one: a. Management’s lack of reasonable justification for a change in accounting principle b. A change in the useful life used to calculate the provision for depreciation expense c. A change in the method of accounting for inventories d. A change from an accounting principle that is not generally accepted to one that is generally accepted
18. Explain about the type of report the Auditor would issue END of the EXAM a. if he disagrees with the management regarding accounting policies and inadequacy of disclosures in financial statements. b. if, during audit, the auditor requests certain documents, which the company refuses to provide.
when the auditor lack independence he or she will issue disclaimer opinion Select one: True False
discuss the type of opinion is issued by the auditorr if he or she is unable to determine the overall fairness of the financial statements?