An auditor would issue an adverse opinion if: * The audit was begun by other O independent auditors who withdrew from the engagement. A qualified opinion cannot be given O because the auditor lacks independence. A restriction on the scope of the audit was significant. The statements taken as a whole do not fairly present the financial condition and results of operations of the company.

An auditor would issue an adverse opinion if: * The audit was begun by other O independent auditors who withdrew from the engagement. A qualified opinion cannot be given O because the auditor lacks independence. A restriction on the scope of the audit was significant. The statements taken as a whole do not fairly present the financial condition and results of operations of the company.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: A CPA audits the financial statements of an issuer. Which statement relating to CAMs is TRUE? a. If…

A: Critical Audit Matters which is also written as CAMs are the matters which arises from the audit and…

Q: whether there is a reasonable possibility that the company's internal control system will fail to…

A: Internal control is the managements’ effective and efficient controls for achieving goals and…

Q: Audit quality has been in the hot seat in recent times as the registered company auditors had not…

A: To maintain, regulate, and improve the standards of accounting and auditing and to look after the…

Q: While performing your audit of Williams Paper Company, you discover evidence that indicates that…

A: Going Concern: A going concern is a word used in accounting to describe a corporation that has the…

Q: An adverse opinion is most likely to be included in an audit report when Multiple Choice A…

A: There are 4 types of audit opinions. 1.unqualified 2.Qualified 3.Disclaimer 4.Adverse opinion

Q: If the auditor is auditing a public company in the United States and must report on internal…

A: Adverse Opinion: When an auditor provides an "Adverse Opinion," it indicates that a company's…

Q: action which can be taken by SAICA against the external auditor if he/she applied negligence in…

A: The action that can be taken by SAICA ( South African Institute of Chartered Accountants) against…

Q: When a client’s financial statements contain a material departure from an FASB Statementon…

A: Financial statements: Financial statements are condensed summary of transactions communicated in the…

Q: The acceptable audit risk for the financial statements overall tends to be low and is set by the…

A: In auditing, setting the acceptable audit risk for financial statements is crucial for ensuring the…

Q: Why might an auditor issue a disclaimer of opinion after an audit? A. All of these may cause an…

A: Disclaimer of opinion: The disclaimer of opinion is the opinion given by the auditor on the…

Q: Some criticize the accounting profession for using expressions in the audit report that seem to be…

Q: Risk of incorrect acceptance is defined as _______. the risk that the auditor concludes that a…

A: Risk of incorrect acceptance may be defined as situation where audit sample supports a conclusion…

Q: Pick correct option : If a company receives an unqualified audit opinion it means the auditors:…

A: An unqualified opinion is an independent auditor's judgment that a company's financial statements…

Q: : When client-imposed restrictions significantly limit the scope of the audit, the auditor generally…

A: Solution: True, When client-imposed restrictions significantly limit the scope of the audit, the…

Q: n, which of the following should be included in the opinion paragraph? The reasons the…

A: The Generally Accepted Accounting Principles (GAAP ) are a collection of accounting rules and…

Q: When an auditor-client conflict arises during an audit engagement, the client and/or the current…

A: Introduction : After being recruited to produce an impartial report on correct accounting treatment…

Q: What are the differences between business failure, auditor failure, and audit risk? Is it fair to…

A: Audit risk is the risk which arises due to the probability or the chance of reporting the financial…

Question

An auditor would issue an adverse
opinion if: *
The audit was begun by other
O independent auditors who withdrew
from the engagement.
A qualified opinion cannot be given
O because the auditor lacks
independence.
A restriction on the scope of the audit
was significant.
The statements taken as a whole do
not fairly present the financial
condition and results of operations of
the company.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

What matters are communicated to those charged with governance at the end of an audit? (Several choices may be correct.) Material uncertainties related to events and conditions casting doubt on the entity’s ability to continue as a going concern. Any suspected non-compliance with laws and regulations. Expected modifications to the audit report. General approach and overall scope of the audit. Any misstatements found during the audit that were corrected by management.
In a financial statement audit, inherent risk represents a. The risk that misstatements could occur and not be detected by the auditor's procedures. b. The risk that misstatements could occur and not be prevented or detected by the system of internal control. c. The risk that the auditor fails to modify materially misstated financial statements. d. The susceptibility of an account balance to misstatement that could be material.
Which of the following statements is false when a company’s internal audit department is asked to complete consulting work? In some instances, management or the audit committee may be somewhat averse to the concept that internal auditors should provide consulting services, primarily because they fear it would impair the internal auditors’ objectivity. the internal audit charter should include provisions for consulting engagements as the internal audit function would then have access to all areas of the organization when performing consulting engagements as it does when performing assurance engagements. Not including consulting services in the charter will never create confusion should the internal audit function decide to provide any form of advice, and will never increase the likelihood for disagreement regarding the internal audit function’s position on consulting services.
Your answer is incorrect. During the audit of Millennium Corporation, the audit firm, Tyson CPAs has advised firm management that they plan to confirm a sample of accounts receivable balances with a randomly selected pool of the client's customers. The client has refused permission for the auditors to undertake this procedure, citing customer privacy over balances owed to the firm. At this juncture, what might the auditors decide to do? Ⓒ The auditors are most likely to consider withdrawing from the engagement. If management is uncooperative, it is probably because they are hiding fraud or other material errors. O The auditors are likely to proceed with contacting a sample of accounts receivable customers anyway. As these customers represent third parties, the auditor does not need the client's expressed permission to contact them. O The auditors may attempt perform alternative audit procedures. If they are able to do this, they may be able to offer the same level of assurance in this…
i need the answer quickly
An auditor has concluded that substantial doubt exists and that the client will not be able to meet its obligations as they become due for a reasonable period of time. Financial statement and footnote disclosures are adequate, detailing the conditions, events, and management's plans to alleviate the doubt. However, the CPA believes that substantial doubt remains. The CPA must add a Going Concern section to the audit report, discussing the Substantial Doubt. How should the audit opinion be modified? a. No modification. b. A qualified opinion. c. An adverse opinion. d. A disclaimer of opinion.
Explain how the circumstances under each of the following might reflect failed leadership by auditors and the audit firm: • Under-reporting of time on an engagement• Premature sign-off on audit procedures• Accepting weak client explanations for accounting
The Auditor prepares a disclaimer of opinion: a. When he cannot find any misstatement in the report. b. When the financial statements are not following GAAP. c. When he finds some discrepancy in the treatment of some items. d. When he is not able to obtain sufficient appropriate audit evidences about an issue.
Which of the following conditions or events would most likely cause an auditor to have substantial doubt about an entity's ability to continue as a going concern? Select one: O a. Significant increase in related-party transactions. O b. Research and development projects are postponed. O c. The CEO, who is key to the company's operations, resigned. O d. All of the options are correct.
When financial statements are affected by a material departure from generally accepted accounting principles, the auditors should: Withdraw from the engagement. Issue an unmodified opinion with a basis for modification paragraph. Issue an "except for" qualification or a disclaimer of opinion. Issue an "except for" qualification or an adverse opinion.
Negative Assurance in Review Reports. One portion of the report on a review services engagement is the following: “Based on my review, I am not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformitywith generally accepted accounting principles [or another framework for financial reporting].”Required:a. Is this paragraph a “negative assurance” given by the accountants?b. Why is negative assurance generally prohibited in audit reports?c. What justification is there for permitting negative assurance in a review services report on unaudited financial statements and on interim financial information?
The requirement for an attitude of scepticism means that the auditor should A) perform additional tests of controls to increase the probability of discovering fraud or errors. B) plan and conduct the audit with an attitude of distrust in management. C) not be blind to evidence that suggests the documents, books, or records have been altered or are incorrect. D) not consider management's explanation as evidence on any subject