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 18.21MCQ
To determine
Introduction:
Audit is a process of evaluating the accuracy of financial information in order to reach a level of assurance within the auditor which would allow expression of an opinion on the reliability of information presented.
Audit engagements of special nature, allow the auditor to express opinion on individual item or group of items of financial statement without undertaking the audit of entire set of financial statement.
The opinion expressed in such a case shall be only for the item audited and this fact needs to be stated in audit report.
To select: The correct option.
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Students have asked these similar questions
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..
Which of the following is true if an auditor performs nonaudit services for a governmententity?a. The scope of the audit must be reduced so that the auditor does not audit the area forwhich the nonaudit work was performed.b. The auditor is prohibited from providing nonaudit work in areas directly related to theproduction of accounting information.c. The senior members of the government entity must document their review of the nonaudit service and indicate why it is appropriate for the auditors to perform this service.d. The scope of the audit cannot be reduced because the nonaudit work was performed bythe public accounting firm.
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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Similar questions
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- Which of the following is NOT an auditor's responsibility? Obligation to report any breach of the law Obligation to report to members Obligation to report to the bankers of the corporation Signing the audit report is a requirement.arrow_forwardThe scope of an audit is not restricted when an attorney letter limits the response toa. Matters to which the attorney has given substantive attention in the form of legalrepresentation.b. An evaluation of the likelihood of an unfavorable outcome of the matters disclosed bythe entity.c. The attorney’s opinion of the entity’s historical experience in recent similar litigation.d. The probable outcome of asserted claims and pending or threatened litigationarrow_forwardDescribe the action that an auditor should take if an attorneyrefuses to provide information that is within the attorney’s jurisdiction and may directlyaffect the fair presentation of the financial statements.arrow_forward
- Smith CPAs have requested that an audit client add a note disclosure to the financial statements related to their ability to operate as a going concern. The client has refused to do so; citing differences in opinion on some key loans that they believe will be refinanced. What should the auditors do at this point? The auditors should request a meeting with the client's board of directors, and discuss the issue with them. The auditors should consider modifying the opinion for a material departure. The auditors should consider disclaiming an opinion on the financial statements to preserve the reputation of the firm. The auditors should consider issuing a scope limitation, on the basis that management is not willing to make the necessary amendment.arrow_forwardA group auditor decides not to take responsibility for the component auditor's audit of a subsidiary. The effect on the audit report is a. An additional paragraph to disclaim an opinion on the group auditor's audit. b. An additional paragraph qualifying an opinion on the group auditor's audit. c. A detail, in terms of dollars and percentages, of the group auditor's work in the Opinion section of the audit report. d. A detail, in terms of dollars and percentages, of the group auditor's work in the Basis for Opinion section of the audit report.arrow_forwardNoncompliance 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_forward
- 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,…arrow_forwardIf a principal auditor decides to refer in his or her report to the audit of anotherauditor, he or she is required to disclose the(1) name of the other auditor.(2) nature of the inquiry into the other auditor’s professional standing and extent ofthe review of the other auditor’s work.(3) portion of the financial statements audited by the other auditor.(4) reasons for being unwilling to assume responsibility for the other auditor’s work.arrow_forwardIf in the auditor’s judgment, management’s use of the going concern basis of accounting in the preparation of the financial statements is inappropriate: A. The auditor will give a disclaimed of opinion. B. The auditor shall express an adverse opinion. C. The auditor shall express an unmodified opinion with a separate section. D. The auditor shall express a qualified opinion.arrow_forward
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