Management of COV Limited has decided not to disclose auditor remuneration for tax services provided in the accounts as the amount is not material. What audit opinion would the auditor MOST likely issue foe the COV Limited engagement? Select one: O Qualified. O Unmodified with an Emphasis of Matter paragraph. O Qualified with an Other Matter paragraph. O Unmodified.

Management of COV Limited has decided not to disclose auditor remuneration for tax services provided in the accounts as the amount is not material. What audit opinion would the auditor MOST likely issue foe the COV Limited engagement? Select one: O Qualified. O Unmodified with an Emphasis of Matter paragraph. O Qualified with an Other Matter paragraph. O Unmodified.

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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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
when the auditor lack independence he or she will issue disclaimer opinion Select one: True False
Scope Limitations. Situations in which auditors are unable to obtain sufficient appropriateevidence necessary to support their opinion on the entity’s financial statements are referredto as scope limitations.Required:a. Distinguish between client-imposed scope limitations and circumstance-imposed scopelimitations. Which of these is generally of more concern to auditors?b. Why do scope limitations impact the auditors’ ability to express an opinion on the entity’sfinancial statements?c. Assume that a circumstance-imposed scope limitation prevented auditors from performing procedures they considered to be necessary. How would each of the following factors independently influence the opinion expressed on the entity’s financial statements?1. The account balances affected by the scope limitation are not material to the entity’sfinancial position, results of operations, or cash flows.2. The account balances affected by the scope limitation are material to the entity’sfinancial position,…
8. In which of the following situations would an auditor originally choose between expressing a qualified opinion or an adverse opinion? a. The auditor did not observe the entity's physical inventory and is unable to become satisfied about its balance by other auditing procedure b. Conditions that cause the auditor to have substantial doubt about the entity's ability to continue as a going concern are inadequately disclosed. c. Both a and b. с. d. Neither a nor b.
What is the appropriate nature of opinion when the auditor is unable to obtain sufficient appropriate audit evidence 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? a. Unmodified opinion. b. Disclaimer of opinion. c. Qualified opinion. d. Adverse opinion.
Question 2 Auditors found that the company under audit has not capitalized a material amount fo leases in the financial statements. When considering the materiality of this departure from GAAP, the auditor would choose between which reporting opinion? Unmodified or unqualified opinion or disclaimer of opinion Unmodified (unqualified) opinion or qualified opinion Unmodified with an emphasis of matter paragraph. Qualified or adverse opinion.
None
How is the auditors’ responsibility for expressing the opinion on financial statements disclosed in the standard (unmodified) report for a nonpublic company?a. Stated explicitly in the Auditor’s Responsibility section.b. Unstated but understood in the Auditor’s Responsibility section.c. Stated explicitly in the opinion paragraph.d. Stated explicitly in the introductory paragraph.
A CPA – (a) may use a client’s estimate of dollar amounts in preparing a tax return only if the client provides a sworn affidavit stating that supporting documents are lost. (b) generally may use a client’s estimated amounts in preparing a tax return sub-ject to determining that the amounts are reasonable based on all known facts. (c) may use her / his own estimate of some dollar amount if the client’s estimate is deemed to be either inadequate or excessive. (d) may never under any circumstances put an estimated amount on a client’s tax return and in fact would risk (i) losing her / his state CPA license and/or (ii) criminal sanctions imposed by the IRS for doing so.
s1: The auditor's report on the group financial statements shall not refer to a component auditor, unless required by law or regulation to include such reference S2. The auditor shall not refer to the work of an auditor's expert in an auditors report containing an unmodified opinion unless required by law or regulation to do so. O S1 is True, S2 is False O S1 is False, S2 is True O Both statements are True O Both statements are False
The auditors determined that the entity is suffering financial difficulty and its going-concern status is seriously in doubt. Assuming that the entity adequately disclosed this matter in the financial statements, the auditors must choose between which of the following auditors’ report alternatives?a. Unmodified opinion with a reference to going-concern or disclaimer of opinion.b. Standard (unmodified) report or a disclaimer of opinion.c. Qualified opinion or adverse opinion.d. Standard (unmodified) report or adverse opinion.
9. In which of the following types of reports do the auditors express negative assurance? Group of answer choices Letters for underwriters. Reports on audits of financial statements on a basis other than generally accepted accounting principles. Reports on audits of specified accounts. Reports on summary financial statements.