DEPARTMENT OF ACCOUNTING, TAXATION, AND LEGAL STUDIES IN BUSINESS chapter 3 homework
3-23
a.2 b.4 c.3
3-24
a.3 b.4 c.1
3-25
a.3 b.2 c. 3
3-26
a. The auditor cannot say the financial statements are correctly stated. Things could change during the audition period. And there are some parts that auditor does not responsible for.
Because we cannot audit every single thing.
b. It does not say which accounting principles to follow.
c. Sorry I don’t know the answer.
d. Write down the CPA firm rather than the name of the CPA because it’s the firm to take responsible rather than any individual.
e. It’s not the auditor’s duty to check out whether the financial statements are without mistake, they only perform to see if they’re fairly presented.
3-27
a. The changing of accounting method which disclosed in footnote 12, and the highly possible lose litigation disclosed in footnote does not need to mention.
“Bellamy is a private corporation and is presenting comparative financial statements.” Does not need to mention.
b. The unpaid dividends should be reported, since it has much to do with the financial situation with the company.
The auditor should report that the company is unwilling to present the cash flow statement.
Auditor’s duty does not include to check the financial statements are free of mistakes.
The report should include a title and data. Also it does not include the responsibility for both auditor and the manager.
The auditor failed to say which accounting principle he’s applying.
3-28
1. The scope of auditor is restricted and strongly related to financial statements. It’s highly material and should be disclaimed.
2. The auditor has some benefit with the clients so it’s not independent anymore and should be disclaimed.
3. Unqualified and not material. Change type of the business has nothing to do with the principles and is fully disclosed.
It’s not the changing of the accounting principles
4. With the doubt of the continue possibility, the report type should be unqualified with
a.2 b.4 c.3
3-24
a.3 b.4 c.1
3-25
a.3 b.2 c. 3
3-26
a. The auditor cannot say the financial statements are correctly stated. Things could change during the audition period. And there are some parts that auditor does not responsible for.
Because we cannot audit every single thing.
b. It does not say which accounting principles to follow.
c. Sorry I don’t know the answer.
d. Write down the CPA firm rather than the name of the CPA because it’s the firm to take responsible rather than any individual.
e. It’s not the auditor’s duty to check out whether the financial statements are without mistake, they only perform to see if they’re fairly presented.
3-27
a. The changing of accounting method which disclosed in footnote 12, and the highly possible lose litigation disclosed in footnote does not need to mention.
“Bellamy is a private corporation and is presenting comparative financial statements.” Does not need to mention.
b. The unpaid dividends should be reported, since it has much to do with the financial situation with the company.
The auditor should report that the company is unwilling to present the cash flow statement.
Auditor’s duty does not include to check the financial statements are free of mistakes.
The report should include a title and data. Also it does not include the responsibility for both auditor and the manager.
The auditor failed to say which accounting principle he’s applying.
3-28
1. The scope of auditor is restricted and strongly related to financial statements. It’s highly material and should be disclaimed.
2. The auditor has some benefit with the clients so it’s not independent anymore and should be disclaimed.
3. Unqualified and not material. Change type of the business has nothing to do with the principles and is fully disclosed.
It’s not the changing of the accounting principles
4. With the doubt of the continue possibility, the report type should be unqualified with