Week_7_Chp_17,_18[1]

Week_7_Chp_17,_18[1] - 17-21(a)Generally, the independent...

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Unformatted text preview: 17-21(a)Generally, the independent auditors must issue a disclaimer of opinion when client imposed restrictions limit significantly the scope of the audit, because such restrictions lead to questions concerning whether the client is withholding important information.(b)Generally, the principal auditors issue an unqualified opinion when they decide to make reference to the report of another CPA firm as a basis, in part, for their opinion. Such a reference indicates a sharing of responsibility for the scope of the audit; it does not represent a qualification of the auditors' report.(c)A lack of disclosure leads to either a qualified opinion or an adverse opinion. Since it is a note disclosurewith no income effectthat is being omitted, one would generally expect issuance of a qualified opinion.17-26(a)(3)When the auditors take exception to the application of accounting principles in the client's financial statements, they will issue either an "except for" qualified, or adverse opinion, depending on the materiality of the problem.(b)(2)The audit report should be dated no earlier than when the auditors have accumulated sufficient competent evidence. This date is often the last day of fieldwork.(c)(1)Reference to the work of another auditor is not, in itself, a qualification of the auditors' report. This reference does not lessen the auditors' collective responsibility. Rather, it merely divides this responsibility among two or more CPA firms.(d)(4)This phrase violates the fourth standard of reporting, because it does not give the reader of the report a clear-cut indication of the auditors' opinion. The phrase appears to modify the standard opinion paragraph, but is not forceful enough to constitute qualifying language.(e)(1)The auditorcommunicates through the auditors' report, and therefore only answer (1) is correct. Note that the clientwill include a discussion of the related party transactions in a note to the financial statements....
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Week_7_Chp_17,_18[1] - 17-21(a)Generally, the independent...

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