Unit 17 Quiz
Chapter 17
Auditors' Reports
True / False Questions 1. Audit reports should be dated the date on which the financial statements are issued.
True False 2. When the auditors are unable to comply with generally accepted auditing standards, they should issue an opinion that is unqualified, but include an additional explanatory paragraph in the report.
True False 3. When evaluating the results of audit tests, materiality depends upon both the dollar amount and the nature of the item.
True False 4. A public company's financial statements should be prepared following standards of the Public Company Accounting Oversight Board.
True False 5. If financial statements fail to disclose a material fact, the …show more content…
A third party who requested that a copy of the audit report be sent to her.
C. The president of the corporation whose financial statements were examined.
D. The chief financial officer. 34. The term "except for" in an audit report is:
A. Used in an adverse opinion.
B. No longer considered appropriate.
C. Used in a qualified opinion
D. Used for an unqualified opinion when an explanatory paragraph is added. 35. The unqualified standard audit report of a nonpublic company does not explicitly state that:
A. The financial statements are the responsibility of the company's management.
B. The audit was conducted in accordance with accounting principles generally accepted in the United States of America.
C. The auditors believe that the audit provides a reasonable basis for their opinion.
D. An audit includes assessing the accounting principles used. 36. Which of the following is not a difference between the audit report of a nonpublic and public company?
A. The nonpublic company report includes the word "Registered" in the title.
B. The nonpublic company report refers to standards of the PCAOB.
C. The nonpublic company report has an additional paragraph referring to the client's fraud prevention …show more content…
An auditor has been asked to report on the balance sheet of Kane Company but not on the other basic financial statements. The auditor will have access to all information underlying the basic financial statements. Under these circumstances, the auditor:
A. May accept the engagement because such engagements merely involve limited reporting objectives.
B. May accept the engagement but should disclaim an opinion because of an inability to apply the procedures considered necessary.
C. Should refuse the engagement because there is a client-imposed scope limitation.
D. Should refuse the engagement because of a departure from generally accepted auditing standards. 66. When the auditor is unable to determine the amounts associated with the illegal acts of client personnel because of an inability to obtain adequate evidence, the auditor should issue a(an):
A. "Subject to" qualified opinion.
B. Disclaimer of opinion.
C. Adverse opinion.
D. Unqualified opinion with a separate explanatory paragraph. 67. If the principal auditor decides to make reference to the other auditor's audit, the introductory paragraph must specifically indicate the:
A. Magnitude of the portion of the financial statements examined by the other
Auditors' Reports
True / False Questions 1. Audit reports should be dated the date on which the financial statements are issued.
True False 2. When the auditors are unable to comply with generally accepted auditing standards, they should issue an opinion that is unqualified, but include an additional explanatory paragraph in the report.
True False 3. When evaluating the results of audit tests, materiality depends upon both the dollar amount and the nature of the item.
True False 4. A public company's financial statements should be prepared following standards of the Public Company Accounting Oversight Board.
True False 5. If financial statements fail to disclose a material fact, the …show more content…
A third party who requested that a copy of the audit report be sent to her.
C. The president of the corporation whose financial statements were examined.
D. The chief financial officer. 34. The term "except for" in an audit report is:
A. Used in an adverse opinion.
B. No longer considered appropriate.
C. Used in a qualified opinion
D. Used for an unqualified opinion when an explanatory paragraph is added. 35. The unqualified standard audit report of a nonpublic company does not explicitly state that:
A. The financial statements are the responsibility of the company's management.
B. The audit was conducted in accordance with accounting principles generally accepted in the United States of America.
C. The auditors believe that the audit provides a reasonable basis for their opinion.
D. An audit includes assessing the accounting principles used. 36. Which of the following is not a difference between the audit report of a nonpublic and public company?
A. The nonpublic company report includes the word "Registered" in the title.
B. The nonpublic company report refers to standards of the PCAOB.
C. The nonpublic company report has an additional paragraph referring to the client's fraud prevention …show more content…
An auditor has been asked to report on the balance sheet of Kane Company but not on the other basic financial statements. The auditor will have access to all information underlying the basic financial statements. Under these circumstances, the auditor:
A. May accept the engagement because such engagements merely involve limited reporting objectives.
B. May accept the engagement but should disclaim an opinion because of an inability to apply the procedures considered necessary.
C. Should refuse the engagement because there is a client-imposed scope limitation.
D. Should refuse the engagement because of a departure from generally accepted auditing standards. 66. When the auditor is unable to determine the amounts associated with the illegal acts of client personnel because of an inability to obtain adequate evidence, the auditor should issue a(an):
A. "Subject to" qualified opinion.
B. Disclaimer of opinion.
C. Adverse opinion.
D. Unqualified opinion with a separate explanatory paragraph. 67. If the principal auditor decides to make reference to the other auditor's audit, the introductory paragraph must specifically indicate the:
A. Magnitude of the portion of the financial statements examined by the other