Loose-leaf For Auditing & Assurance Services: A Systematic Approach
11th Edition
ISBN: 9781260687637
Author: William F Messier Jr, Steven M Glover Associate Professor, Douglas F Prawitt Associate Professor
Publisher: McGraw-Hill Education
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Question
Chapter 18, Problem 18.10MCQ
To determine
Concept Introduction:
Audit report includes the opinion of the auditor on the financial statements. Auditors provide their opinions based on the audit evidences obtained during the
To choose: The case in which auditor would issue an unqualified audit report with no explanatory paragraph.
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Students have asked these similar questions
The auditors include an emphasis-of-matter paragraph in an otherwise unmodified report on the entity's financial statements to emphasize that the entity being reported on had significant transactions with related parties. The inclusifis considered a qualification of the opinion.on of this separate paragraph
Other matters to which the auditor may wish to refer in an Other Matter(s) paragraph but which are not required to be presented or disclosed in the financial statements by the applicable financial reporting framework include, for example, the following:
Group of answer choices
all three other choices
Information in a document containing audited financial statements that is materiallyinconsistent with those financial statements.
In rare circumstances, other matters that the auditor considers necessary tocommunicate to the user, for example, where the auditor judges it necessary to explain whythe auditor is unable to resign from the engagement even though the possible effect of an inability to obtain sufficient appropriate audit evidence due to a scope limitation imposed by management is pervasive
A predecessor auditor’s report on the corresponding figures in the incoming auditor’sreport for the current period where the incoming auditor is permitted to make such areference
In which of the following circumstances does not require
auditors to modify the content of the standard report on the
entity's financial statements?
The auditors reference component auditors
O who examined a subsidiary of group financial
statements.
Chapter 18 Solutions
Loose-leaf For Auditing & Assurance Services: A Systematic Approach
Ch. 18 - Prob. 18.1RQCh. 18 - Prob. 18.2RQCh. 18 - Prob. 18.3RQCh. 18 - Prob. 18.4RQCh. 18 - Prob. 18.5RQCh. 18 - Prob. 18.6RQCh. 18 - Prob. 18.7RQCh. 18 - Prob. 18.8RQCh. 18 - Prob. 18.9RQCh. 18 - Prob. 18.10MCQ
Ch. 18 - Prob. 18.11MCQCh. 18 - Prob. 18.12MCQCh. 18 - Prob. 18.13MCQCh. 18 - Prob. 18.14MCQCh. 18 - Prob. 18.15MCQCh. 18 - Prob. 18.16MCQCh. 18 - Prob. 18.17MCQCh. 18 - Prob. 18.18MCQCh. 18 - Prob. 18.19MCQCh. 18 - Prob. 18.20MCQCh. 18 - Prob. 18.21MCQCh. 18 - Prob. 18.22PCh. 18 - Prob. 18.23PCh. 18 - Prob. 18.24PCh. 18 - Prob. 18.25PCh. 18 - Prob. 18.26PCh. 18 - Prob. 18.27PCh. 18 - Prob. 18.28P
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- 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?arrow_forwardPlease do not give image formatarrow_forwardScope 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,…arrow_forward
- What two conditions must be present for the auditor to issue anunqualified opinion on internal control over financial reporting? What type of conditionwill cause the auditor to issue a qualified or disclaimer of opinion on internal controlover financial reporting?arrow_forwardBasic Reports. The concepts of materiality and pervasiveness are important to auditors in examinations of financial statements and expressions of opinion on these statements.Required:How will materiality influence auditors’ reporting decisions in the following circumstances? In your response, consider both the matter’s materiality and pervasiveness.a. The entity prohibits confirmation of accounts receivable, and sufficient and appropriate evidence cannot be obtained using alternative procedures.b. The entity is a gas and electric utility company that follows the practice of recognizing revenue when it is billed to customers. At the end of the year, amounts earned but not yet billed are not recorded in the accounts or reported in the financial statements.c. The entity leases buildings for its chain of transmission repair shops under terms that qualify as capital leases under ASC 840. These leases are not capitalized as leased property assets and lease obligations.d. The entity has lost…arrow_forwardWhich may not be shown in an auditor's report of a non listed entity? A. Auditor's address B. Management responsibility paragraph C. Key audit matters paragraph D. Auditor's responsibility paragrapharrow_forward
- Which 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_forwardWhat are the two requirements for the auditor to offer an unqualified opinion on internal financial reporting controls? What causes the auditor to offer a qualified or disclaimer opinion on internal control over financial reporting?arrow_forwardDisclaimer of opinion rendered by an independent auditor of financial statements stating that the financial statements have been presented fairly in accordance with GAAP. True Falsearrow_forward
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