2. Consider the following statements: I. Inconsistent application of accounting principles (i.e. a change in accounting principle, which the auditor agrees is acceptable) would result in a unqualified audit opinion. II. For a change in accounting principles that management does NOT justify to the auditor, the auditor will likely issue a Disclaimer of an audit opinion. a. Iis true; Il is true b. Tis true; Il is false c. I is false; Il is true

2. Consider the following statements: I. Inconsistent application of accounting principles (i.e. a change in accounting principle, which the auditor agrees is acceptable) would result in a unqualified audit opinion. II. For a change in accounting principles that management does NOT justify to the auditor, the auditor will likely issue a Disclaimer of an audit opinion. a. Iis true; Il is true b. Tis true; Il is false c. I is false; Il is true

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter15: Audit Reports For Financial Statement Audits

Section: Chapter Questions

Problem 3CYBK

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Similar questions

if a change in accounting principle is inseparable from the effect of a change in estimate, this material event should be accounted for as a change in A. Estimate, and the auditor should report on consistency.B. Principle, and the auditor should report on consistencyC. Estimate, and the auditor should not recognize the change in the reportD. Principle, and the auditor should not recognize the change in the report
Two factors that typically lead to ethical violations are relevance and timeliness of accounting information. Group of answer choices True False
In a review engagement the public accountant provides negative assurance in the report which is issued. This can best be described by the phrase: a. Nothing has come to my attention b. The financial statements present fairly c. We are unable to express an opinion d. Except for the issues explained above
When financial statements are affected by a material departure from generally accepted accounting principles, the auditors should: Withdraw from the engagement. Issue an unmodified opinion with a basis for modification paragraph. Issue an "except for" qualification or a disclaimer of opinion. Issue an "except for" qualification or an adverse opinion.
Noncompliance 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, False
2. A client has departed from GAAP for what you, the auditor, considers to be justifiable. The financial statements would have been misleading if the client had not departed from GAAP. Circumstance: Type of Opinion:
If 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.
From the options given below which of the following is not the reason of inherent limitation of audit? a. Limitation in accounting system O b. Use of human judgment O c. Poor planning O d. Human errors
Which one of the following statements is false? O A. Management accounting reports tend to be specific. O B. Management accounting reports are produced as often as required. O C. Management accounting reports are subjected to the principles and practices of GAAP. O D. Management accounting reports are not required by law.
2. The auditors who find that the client has committed an illegal act would be most likely to withdraw from the engagement when the: Select one:a. Illegal act has material financial statement implications.b. Auditors cannot reasonably estimate the effect of the illegal act on the financial statements.c. Illegal act has received widespread publicity.d. Management fails to take appropriate corrective action.
Other changes may affect comparability but not consistency in the use of accounting principles and do not require the inclusion of an explanatory paragraph * True O False The audit manager is responsible for ensuring that the audit is properly planned, including scheduling of team members. * O True False
{Auditing} 15. Find the nature of materiality if the client incorrectly selects and applies accounting policy which has negligible effect in the current period but has significant effect on the future period. a. Material by nature b. None of the options c. Materiality by the amount for financial statements as a whole d. Either materiality by amount or materiality by nature