EBK PRINCIPLES OF AUDITING & OTHER ASSU
21st Edition
ISBN: 9781260299434
Author: WHITTINGTON
Publisher: YUZU
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Question
Chapter 17, Problem 38ITC
To determine
Describe the reporting circumstances, related types of opinion possible, and the appropriate report alteration for the given scenarios.
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Students have asked these similar questions
Which item regarding an Emphasis of Matter paragraph is true?
a.
The auditor will use the E of M to restrict distribution of the audit report.
b.
The auditor will use the E of M when the client has corrected an error in the previous financial statements.
c.
An E of M will be used when a material error exists in the current financial statements.
d.
The E of M paragraph is usually located immediately before the opinion paragraph.
e.
The E of M paragraph would be used to discuss a client's change in the method to estimate bad debts.
A misstatement in the financial statements can be considered material if knowledge of themisstatement will affect a decision of
A.
an accountant.
B.
the PCAOB.
C.
the SEC.
D.
a reasonable user of the financial statements
Select the necessary words from the list of possibilities to complete the following statements: adverse, basis for modification paragraph(or basis for qualified opinion paragraph, CPA firm, disclaimer of opinion, expressing an opinion, management, unmodified, unqualified, update
Statements
Answer
1.
If the auditors have examined the prior year's financial statements presented for comparative purposes, they should __________ their opinion for any new information.
5.
All nonpublic company audit reports that are qualified should contain a(n) __________ explaining the details of the qualification.
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
- Assume that the FASB is considering revising an important accounting standard.Required:1. What constraint applies to the FASB’s consideration of whether to require companies to provide new information?2. In what Concepts Statement is that constraint discussed?3. What are some of the possible costs that could result from a revision of an accounting standard?4. What does the FASB do in order to assess possible benefits and costs of a proposed revision of an accounting standard?arrow_forwardChoose the letter of the correct answer.arrow_forwardWhich of the following statements relating to the role ofprofessional judgment in the financial reporting process is(are) true?a. Different accountants may evaluate similar situationsdifferently.b. The determination of which items should be disclosedin notes to fi nancial statements requires professionaljudgment.c. Once a complete list of generally accepted accountingprinciples is prepared, judgment by accountants will nolonger enter into the fi nancial reporting process.d. The possibility exists that professional judgment latermay prove to have been incorrect.arrow_forward
- Noncompliance includes transactions entered by the entity’s employees and management in their personal capacity. The preliminary judgment or estimate about materiality represents the maximum amount by which a set of financial statements could be misstated and still not cause the auditor to believe that the decisions of reasonable users would be affected. Group of answer choices False, True True, False True, True False, Falsearrow_forwardWhich of the following would not require an explanatorylemphasis-of- matter paragraph in the auditor's report? * Opinion based in part on the report of another auditor. Lack of consistency in the financial statements due to accounting changes. O Additional emphasis. O Going concern.arrow_forwardWhich of the following is incorrect? A. Non-assurance engagement include agree-upon procedures, compilation of financial or other information and tax consulting B. Assurance service report on the quality of information C. All engagements perform by the professional accountant are assurance engagement D. Assurance engagement encompass attestation engagementarrow_forward
- In virtually all circumstances, a fair presentation is achieved by compliance with applicable IFRSS. A fair presentation also requires an entity: (choose the incorrect statement) * to select and apply accounting policies in accordance with PAS 8 Accounting Policies, Changes in Accounting Estimtes and Errors. PAS 8 sets out a hierarchy of authoritative guidance that management considers in the absence of a standard or an interpretation that specifically applies to an item. to present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information. to provide additional disclosures when compliance with specific requirement in PFRSS is insufficient to enable users understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance. to establish a system of internal control the responsibility for which is the entity's management. Furthermore, the…arrow_forwardWhat is the main purpose of information presented in notes to the financial statements? • To provide disclosures required by generally accepted accounting principles. To correct improper presentation in the financial statements. To provide recognition of amounts not included in the totals of the financial statements. To present management's responses to auditor comments.arrow_forwardWhich case below is not one of the examples of changes that affect consistency and require an explanatory paragraph, if material A. Changes in reporting entities B. Corrections of accounting principle errors C. Changes in accounting principles D. Scope limitationsarrow_forward
- Describe a situation that would require an auditor to give an unmodified opinion without a standard report. Describe a situation that would cause an auditor to modify their opinion. Analyze possible actions an auditor might take if a client’s financial statements depart from GAAP. Do you think the demand for assurance services will increase or decrease in the future? Explain.arrow_forwardWhen 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.arrow_forwardWhich is not a purpose of the IASB’s Conceptual Framework? -To assist auditors in forming an opinion as to whether financial statements conform to generally accepted accounting principles (GAAP). -D. To assist all parties to understand and interpret standards. To assist the IASB to develop IFRS standards that is based on consistent concepts. -To assist preparers to develop consistent accounting policies when no -----Standard applies to a particular transaction or other event, or when a standard allows a choice of accounting policy. Accounts Receivable when classified as trade will always be a? -Long Term Asset -Current Asset -Historical Asset -Non-Current Asset Which of the following statements describing a corporation is not true? -Shareholders own the business and manage its day-today affairs. -A corporation is subject to a greater governmental regulation than a single proprietorship or partnership. -Shareholders…arrow_forward
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