Which of the following factors are to be considered by the auditor to express a modified audit opinion 1. Whether the financial statements are materially misstated. 2. Inability to obtain sufficient appropriate audit evidence. 3. Auditor's Judgement about the possible effects of the matter. 1 only 3 only 1, 2& 3 1 & 2 only

Which of the following factors are to be considered by the auditor to express a modified audit opinion 1. Whether the financial statements are materially misstated. 2. Inability to obtain sufficient appropriate audit evidence. 3. Auditor's Judgement about the possible effects of the matter. 1 only 3 only 1, 2& 3 1 & 2 only

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question 24 Which of the following is true regarding the auditor's responsibility related to reporting? Sufficient appropriate evidence should be obtained to afford a reasonable basis for the opinion regarding financial statements under audit. The audit opinion relates only to the client's financial statements, and does not relate to required footnotes. If the auditor has reservations about the fairness of presentation of the financial statements, the auditor does not need to provide the reason for this reservation. All of the statements provided are true.
Which of the following statements is true? Select one: a. If evidence is subjective, it cannot be reliable b. Evidence must be relevant to all of the audit objectives c. Evidence obtained directly by the auditor may not be reliable if the auditor lacks the qualifications to evaluate the evidence. d. The persuasiveness of evidence can be evaluated after considering its sufficiency
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. Tis true; Il is true b. Iis true; Il is false c. I is false; Il is true d. I is false; II is false
An opinion based in part on the report of another auditor requires a modified wording in the standard unqualified audit report. True O False
S1: When an Other Matter paragraph is included to draw users' attention to a matter relevant to their understanding of the audit of the financial statements, the paragraph is included immediately after the Opinion paragraph and any Emphasis of Matter paragraph. S2: The auditor shall express an adverse opinion when the auditor, having obtained sufficient appropriate audit evidence, concludes that misstatements, individually or in the aggregate, are material, but not pervasive, to the financial statements S1 is True, S2 is False S1 is False, S2 is True Both statements are True Both statements are False
Disclaimer of opinion rendered by an independent auditor of financial statements stating that the financial statements have been presented fairly in accordance with GAAP. True False
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multiple choice explain reason for correct and incorrect option in detail
36 Which one of the following options is the basis for opinion for an auditor? a. Only Sufficient evidence are the basis for audit opinion b. ISA , sufficient and appropriate audit evidence are the basis for audit opinion c. None of the options d. Only ISA is basis of audit opinion
Question 15 As Review of Financial Statements under SSARS is not considered an audit engagement the accountant need not be independent. Answers: True False
s1: Client's representations, both written or oral, are not considered to be a persuasive type of evidence that the auditor obtains. s2: To substantiate the information provided by management about litigation, claims, and assessments, the auditor should ask the client to send letters of audit inquiries to its lawyers. a. BOTH STATEMENTS ARE TRUE b. BOTH STATEMENTS ARE FALSE c. ONLY S1 IS TRUE d. ONLY S2 IS TRUE