Auditing and Assurance Training Audit Reporting and Opinions

Question 1

Which type of auditor's opinion is issued when the financial statements present fairly in all material respects and the audit was conducted without significant scope limitations?

Accepted Answer

Unmodified (clean) opinion

Answer

An unmodified (clean) opinion is issued when financial statements are free from material misstatement and the auditor was not restricted in the scope of the audit.

Question 2

An auditor issues a qualified opinion using the phrase 'except for.' This means:

Accepted Answer

There is a material but not pervasive departure from GAAP or a scope limitation

Answer

A qualified opinion is issued when there is a material but not pervasive misstatement or a scope limitation that does not prevent forming an overall opinion.

Question 3

When the effect of a misstatement is so material and pervasive that the financial statements are misleading as a whole, the auditor issues a(n):

Accepted Answer

Adverse opinion

Answer

An adverse opinion is issued when misstatements are so material and pervasive that the financial statements do not present fairly.

Question 4

A disclaimer of opinion is issued when:

Accepted Answer

The scope limitation is so significant the auditor cannot form any opinion

Answer

A disclaimer of opinion is issued when the auditor is unable to obtain sufficient appropriate audit evidence and the possible effects could be material and pervasive.

Question 5

Which section of the standard auditor's report describes management's responsibility for the financial statements?

Accepted Answer

Management's Responsibility section

Answer

The Management's Responsibility section explicitly describes that management is responsible for the preparation and fair presentation of the financial statements.

Auditing and Assurance Training Practice Test

Auditing and Assurance Training Practice Test

Auditing and Assurance Training Audit Reporting and Opinions