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 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.

The auditors include an emphasis-of-matter paragraph in an otherwise unmodified report on the entity's financial statements to emphasize that the entity being reported on had significant transactions with related parties. The inclusifis considered a qualification of the opinion.on of this separate paragraph

Question 4 Respond to each of the following independent situations involving auditor reports. For each scenario (1)identify the reporting issue involved; (2) explain the type of opinion that should be issued; (3) identify any requiredmodifications of the standard auditor'sreport. The auditor has a disagreem ent with a client overthe adequacy of the recorded bad debt expense and allowance for doubtful accounts. The auditor is convinced that the expense and allowance are understatedby amaterial (but not highly material) amount, but the client has refused to adjust the accounts. 1.4 The auditor has issued a report on a client's financial statem ents prepared on a regulatory basis of accounting. The auditor is also preparing to issue a separate report- on the same client's GAAP financial statements, which will be issued to the public. The auditor feels that the issuance of the report on the regulatory basis statements should be disclosed in the report on the GAAP statements. The auditor…

25. Which of the following would not be included in an accountant's review report on the financial statements of a nonpublic entity? Group of answer choices   A statement that the review was made in accordance with generally accepted auditing standards.   A statement that all information included in the financial statements is the representation of management.   A statement describing the principal procedures performed.   A statement describing the auditor's conclusions based on the results of the review.

A 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.

4. Which of the following statements is true regarding the independent auditors' report? a) A qualified opinion is considered a "clean" opinion since the financials qualify as being in accordance with GAAP. b) An unmodified (unqualified) opinion is given when the financial statements are fairly stated in all material respects, except for a certain issue that the auditors identify in a separate paragraph in their report. c) A disclaimer of opinion is given when the auditors have completed the audit and have found that the financial statements are not fairly stated in all material respects. d) Adverse opinions are fairly common, due to the adverse relationships between auditors and their clients. e) None of the above.