Chuong so 18 Bao cao trong FS kiem toan

1 Which of the following parties is responsible for the fairness of the representations made in financial statements?

• A) entity's management

• B) independent auditor

• C) audit committee

• D) AICPA

2) Which of the following situations will not result in modification of the auditor's report because of a scope limitation?

• A) restriction imposed by the client

• B) reliance placed on the report of another auditor

• C) inability to obtain sufficient appropriate evidential matter

• D) restriction caused by the circumstance of the engagement

3) When the audited financial statements of the prior year are presented together with those of the current year, the continuing auditor's report should cover:

• A) both years.

• B) only the current year.

• C) only the current year, but the prior year's report should be presented.

• D) only the current year, but the prior year's report should be referred to.

4) Management believes, and the auditor is satisfied, that a material loss probably will occur when pending litigation is resolved. Management is unable to make a reasonable estimate of the amount or range of the potential loss, but fully discloses the situation in the notes to the financial statements. If the auditor wishes to call attention to the matter and management does not make an accrual in the financial statements, the auditor should issue a(an):

• A) qualified report due to a scope limitation.

• B) qualified report due to a departure from GAAP

• C) unqualified report with an emphasis paragraph.

• D) standard unmodified auditor's report.

5) For which of the following events would an auditor issue a report that does not include any reference to comparability?

• A) a change in the method of accounting for inventories

• B) a change from an accounting principle that is not generally accepted to one that is generally accepted

• C) a change in the service life used to calculate depreciation expense

• D) a correction of a material misstatement in previously issued financial statements

6) If the auditor believes that there is minimal likelihood that resolution of an uncertainty will have a material effect on the financial statements, the auditor would issue a(n):

• A) "except for" opinion.

• B) adverse opinion.

• C) unqualified opinion.

• D) disclaimer of opinion

7) When comparative financial statements are presented, the auditor’s report should be considered to apply to the financial statements of the:A) periods presented plus the one preceding period.

• A) periods presented plus the one preceding period.

• B) current period only.

• C) current period and those of the other periods presented.

• D) current and immediately preceding period only.

8) A predecessor auditor should complete the following before reissuing a report on statements presented on a comparative basis:

• A) read the financial statements of the current period.

• B) read the financial statements of the past five years.

• C) obtain a letter of representations from the current-year, successor auditor.

• D) read the financial statements of the current period, compare prior-period financial statements with the current-year financial statements, and obtain letters of representation from the management of the entity and from the current-year, successor auditor.

9) In connection with the examination of the consolidated financial statements of Mott Industries, Frazier, CPA, plans to refer to another CPA's examination of the financial statements of a subsidiary company. Under these circumstances, Frazier's report must disclose:

• A) the name of the other CPA and the type of report issued by the other CPA.

• B) the division of responsibility and magnitude of the portion of the financial statements audited by the other auditor.

• C) the nature of Frazier's review of the other CPA's work.

• D) in a footnote the portions of the financial statements that were covered by the examinations of both auditors.

10) If the principal auditor decides to make reference to the other auditor's audit, the opinion section must specifically indicate the:

• A) portion of the financial statements examined by the other auditor.

• B) name of the other auditor.

• C) name of the consolidated subsidiary examined by the other auditor.

• D) type of opinion expressed by the other auditor.