EBK PRINCIPLES OF AUDITING & OTHER ASSU
21st Edition
ISBN: 9781260299434
Author: WHITTINGTON
Publisher: YUZU
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Question
Chapter 17, Problem 25COQ
To determine
Identify how the reference to the component auditor in an audit report on the combined financial statement is made.
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s1: The concentration of the review of working papers done by the manager auditor and partner-in-charge is the overall adequacy of audit evidence obtained, the reasonableness of the conclusions reached, and the implications of the audit findings on the fair presentation of financial statements. s2: The lawyer's refusal to furnish the information requested in the letter of audit inquiry represents a limitation in the scope of the examination sufficient to preclude a disclaimer of opinion.
a. BOTH STATEMENTS ARE TRUE
b. BOTH STATEMENTS ARE FALSE
c. ONLY S1 IS TRUE
d. ONLY S2 IS TRUE
If it is necessary to amend other information in a document containing audited financial statements and the entity refuses to make the amendment, the auditor would consider issuing *
A. Qualified or disclaimer of opinion
B. Qualified or adverse opinion
C. Unmodified opinion with no additional statement pertaining to the other information opinion
D. Unmodified opinion with a statement pertaining to the other information
In which of the following situations would an auditor ordinarily issue an unqualified or
unmodified financial statement audit opinion with no explanatory (or emphasis-of-matter or
other-matter) paragraph?
Multiple Choice
O
O
The auditor decides not to refer to the report of another auditor as a basis,
in part, for the auditor's opinion..
The auditor wishes to emphasize that the entity had significant related-
party transactions.
The auditor has substantial doubt about the entity's ability to continue as a
going concern, but the circumstances are fully disclosed in the financial
statements.
The entity issues financial statements that present financial position and
results of operations but omits the statement of cash flows..
Chapter 17 Solutions
EBK PRINCIPLES OF AUDITING & OTHER ASSU
Ch. 17 - Prob. 1RQCh. 17 - What is the function of notes to financial...Ch. 17 - Prob. 3RQCh. 17 - Prob. 4RQCh. 17 - Prob. 5RQCh. 17 - Prob. 6RQCh. 17 - Prob. 7RQCh. 17 - Prob. 8RQCh. 17 - Prob. 9RQCh. 17 - Prob. 10RQ
Ch. 17 - Prob. 11RQCh. 17 - Prob. 12RQCh. 17 - Prob. 13RQCh. 17 - Prob. 14RQCh. 17 - Prob. 15RQCh. 17 - Prob. 16RQCh. 17 - Prob. 17RQCh. 17 - Prob. 18RQCh. 17 - Prob. 19RQCh. 17 - Prob. 20RQCh. 17 - Prob. 21QRACh. 17 - Prob. 22QRACh. 17 - Prob. 23QRACh. 17 - Prob. 24QRACh. 17 - Prob. 25AOQCh. 17 - Prob. 25BOQCh. 17 - Prob. 25COQCh. 17 - Prob. 25DOQCh. 17 - Prob. 25EOQCh. 17 - Prob. 25FOQCh. 17 - Prob. 25GOQCh. 17 - Prob. 25HOQCh. 17 - Prob. 25IOQCh. 17 - Prob. 25JOQCh. 17 - Prob. 25KOQCh. 17 - Prob. 25LOQCh. 17 - Prob. 26OQCh. 17 - Prob. 27OQCh. 17 - Prob. 28OQCh. 17 - Prob. 29OQCh. 17 - Prob. 30OQCh. 17 - Prob. 31OQCh. 17 - Prob. 32OQCh. 17 - Prob. 33PCh. 17 - Prob. 34PCh. 17 - Sturdy Corporation (a nonpublic company) owns and...Ch. 17 - Prob. 36PCh. 17 - Prob. 37PCh. 17 - Prob. 38ITCCh. 17 - Prob. 39ITCCh. 17 - Prob. 40RDC
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Similar questions
- Which of the following best describes the reason why an independent auditorreports on financial statements?(1) A misappropriation of assets may exist, and it is more likely to be detected byindependent auditors.(2) Different interests may exist between the company preparing the statementsand the persons using the statements.(3) A misstatement of account balances may exist and is generally corrected as theresult of the independent auditor’s work.(4) Poorly designed internal controls may be in existencearrow_forwardWhich of the following ideas is NOT included in the "Purpose" section of the Principles Underlying an Audit Conducted in Accordance with Generally Accepted Auditing Standards? The auditor must plan the audit work properly and supervise any assistants. Management, and those charged with governance, are responsible for the preparation and fair presentation of the financial statements in accordance with the applicable financial reporting framework. The purpose of an audit is to provide users with an opinion on whether the financial statements are presented fairly, in all material respects, in accordance with the applicable financial reporting framework. Management has responsibility to provide the auditor with unrestricted access to individuals within the entity from whom the auditor determines it is necessary to obtain audit evidence.arrow_forwardWhich of the following statements are not true about auditors responsibilities? a) The financial statements are auditors responsibility b) The auditor's responsibility for the audited financial statements is confined to the expression of his or her opinion on them c) To identify and assess the risks of material mis-statement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain sufficient appropriate audit evidence to provide a basis for the auditor’s opinion d) To obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances and for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Only a) and c) All a) , b) , c) and d) Only a) and d) Only a)arrow_forward
- Which of the following statements is not true with respect to the audit examinations andreports for public and nonpublic entities?a. Audit examinations for nonpublic entities are based on user demand but based on legislative requirements for public entities.b. The reports for both public and nonpublic entities express an opinion on the entity’sfinancial statements.c. Auditors are required to express an opinion on internal control in the audit of nonpublicentities but not in the audit of public entities.d. Management is responsible for the fairness of the financial statements for both publicentities and nonpublic entities.arrow_forwardWhen component auditors are involved in the audit of group financial statements, the group auditors may issue a report thata. Refers to the component auditors, describes the extent of the component auditors’ work, and expresses an unmodified opinion.b. Does not consider or evaluate the component auditors’ work but expresses an unmodified opinion in a standard report.c. Places primary responsibility for the reporting on the component auditors.d. Names the component auditors, describes their work, and presents only the group auditors’ report.arrow_forwardWhich of the following presumptions does NOT relate to the reliability of evidence? A. the more effective the internal control structure, the more assurance it provides about the accounting data and financial statements. B.an auditor's opinion, to be economically useful, is formed within reasonable time and based on evidence obtained at a reasonable cost. C. evidence obtained from independent sourcesoutside the entity is more persuasive than evidence secured solely within the entity. D. the independent auditor's direct personal knowledge, obtained through observation and inspection, is more persuasive than information obtained indirectly.arrow_forward
- A number of cases have considered the auditor’s liability in relation to persons other than the immediate client. Even so, the AWA case established that: Select one: a. Duty of care and skill means following the accounting standards b.auditors have a contractual duty to oversee and review the work of inexperienced audit staff c.Auditors are only liable for the proportion of damages attributable to their actions d.Auditors have a duty of care only to the shareholders.arrow_forwardWhen an auditor-client conflict arises during an audit engagement, the client and/or the current auditor may sometimes employ another accounting firm to offer an impartial report on the problem at the core of the conflict - as occurred during Deloitte's 1997 audit of Livent. Discuss the responsibility of accounting firms when they are contracted to provide such a report.arrow_forwardWhich of the following best describes the effect of a contingent fee arrangement on the auditor's independence. A. The contingent fee arrangement does not impair independence if it is consistent with the registered public accountingfirm's quality control policies. B. The contingency fee arrangement impairs independence. C. The contingent fee arrangement does not impair independence unless more than half of the fee is subject to contingencies. D. The contingent fee arrangement impairs independence unless approved by the client's audit committee.arrow_forward
- 4. Which of the following statements is true regarding the independent auditors' report? a) A qualified opinion is considered a "clean" opinion since the financials qualify as being in accordance with GAAP. b) An unmodified (unqualified) opinion is given when the financial statements are fairly stated in all material respects, except for a certain issue that the auditors identify in a separate paragraph in their report. c) A disclaimer of opinion is given when the auditors have completed the audit and have found that the financial statements are not fairly stated in all material respects. d) Adverse opinions are fairly common, due to the adverse relationships between auditors and their clients. e) None of the above.arrow_forwardWhich of the following statements concerning audit evidence is true?(1) To be appropriate, audit evidence should be either persuasive or relevant, butneed not be reliable.(2) The measure of the quantity and quality of audit evidence lies in the auditor’sjudgment.(3) The difficulty and expense of obtaining audit evidence concerning an accountbalance is a valid basis for omitting the test.(4) A client’s accounting records can be sufficient audit evidence to support thefinancial statements.arrow_forwardA CAM should be included in the report if it a. Focuses on matters involving challenging, subjective, or complex auditor judgment. b. Is based on dollar amounts objectively determined and supported by evidence deemed appropriate by the CPA. c. Refers to standards of both the AICPA and the PCAOB. d. Refers to the predecessor CPA not re-issuing the audit opinion on the previous financial statements. e. Focuses on the combination of the audit of the financial statements and the audit of the internal control effectiveness.arrow_forward
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