Auditing and Assurance Training Audit Reporting and Opinions 2

Question 1

When an auditor concludes there is substantial doubt about an entity's ability to continue as a going concern, the auditor should:

Accepted Answer

Include a going concern paragraph and consider the effect on the opinion

Answer

Immediately issue an adverse opinion

Answer

Issue a disclaimer of opinion

Answer

Withdraw from the engagement

Question 2

A 'critical audit matter' (CAM) as defined by the PCAOB is best described as:

Accepted Answer

A matter arising from the audit that was communicated to the audit committee and involved especially challenging judgment

Answer

Any error discovered during the audit

Answer

A scope limitation preventing the issuance of an opinion

Answer

A significant deficiency in internal controls

Question 3

Which type of assurance engagement provides a lower level of assurance than an audit?

Accepted Answer

Review engagement

Answer

Agreed-upon procedures engagement

Answer

Compilation

Answer

Examination engagement

Question 4

In a review engagement, the accountant's conclusion is expressed in what form?

Accepted Answer

Negative assurance: 'nothing came to our attention...'

Answer

Positive assurance: 'the statements are fairly presented'

Answer

No assurance is provided

Answer

Reasonable assurance that no material misstatements exist

Question 5

When comparative financial statements are presented and the prior year was audited by a predecessor auditor, the current auditor should:

Accepted Answer

Refer to the predecessor auditor in the current period report

Answer

Re-audit the prior period statements

Answer

Issue a disclaimer on the prior year figures

Answer

Omit the prior year comparative figures

Question 6

The date of the auditor's report should be:

Accepted Answer

No earlier than the date sufficient appropriate evidence has been obtained

Answer

The last day of the entity's fiscal year

Answer

The date management signs the representation letter

Answer

The date the financial statements are filed with regulators

Question 7

An 'other-matter' paragraph in an audit report differs from an emphasis-of-matter paragraph in that it refers to:

Accepted Answer

A matter not presented or disclosed in the financial statements

Answer

A matter presented in the financial statements

Answer

A change in accounting principle

Answer

A scope limitation affecting the opinion