Chap0120 - Chapter 12 - Reports on Audited Financial...

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Unformatted text preview: Chapter 12 - Reports on Audited Financial Statements CHAPTER 12 Reports on Audited Financial Statements LEARNING OBJECTIVES Review Checkpoints Exercises, Problems, and Simulations 1. Provide an overview of the types of reports that accompany the entity’s financial statements. 1, 2 2. List three general functions of the auditors’ report on an entity’s financial statements. 3 3. Explain the significance of each of the paragraphs in a standard report on an entity’s financial statements. 4, 5, 6, 7 38, 49, 50 4. Describe the types of auditors’ reports that may be issued if an entity’s financial statements contain a departure from generally accepted accounting principles. 8, 9 40, 44 (partial), 46 (partial), 48 (partial), 56, 57 (partial), 59 (partial), 60 (partial), 5. Describe the types of auditors’ reports that may be issued if auditors are unable to comply with generally accepted auditing standards. 10, 11 44 (partial), 46 (partial), 48 (partial), 53, 60 (partial) 6. Describe how the standard report is modified when auditors issue unqualified opinions but reference other matters affecting the audit or the client. 12, 13, 14, 15, 16, 17, 18 39, 42, 43, 44 (partial), 46 (partial), 47, 51, 54, 57 (partial), 58, 59 (partial), 60 (partial) 7. Identify other circumstances affecting auditors’ reporting responsibilities and explain how they affect auditors’ reports on an entity’s financial statements. 19, 20, 21, 22, 23, 24 41, 44 (partial), 45, 52, 55, 60 (partial), 61, 62 12-1 Chapter 12 - Reports on Audited Financial Statements SOLUTIONS FOR REVIEW CHECKPOINTS 12.1 Management prepares a report on the effectiveness of internal control over financial reporting. The auditors prepare reports on (1) the entity’s financial statement and other disclosures and (2) the effectiveness of the entity’s internal control over financial reporting. These can be presented as two separate reports or a combined report. 12.2 Management’s report on internal control over financial reporting consists of the following major components: • A statement indicating that management is responsible for establishing and maintaining adequate internal control over financial reporting. • A statement identifying the framework used by management to assess the effectiveness of the entity’s internal control. • Management’s opinion on the effectiveness of the entity’s internal control, including an explicit statement as to whether the internal control over financial reporting is effective. • A statement that the registered accounting firm auditing the financial statements (auditor) has issued an attestation report on the entity’s internal control over financial reporting....
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This note was uploaded on 06/06/2010 for the course ACC 470 taught by Professor Tabd during the Spring '10 term at University of Nevada, Las Vegas.

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Chap0120 - Chapter 12 - Reports on Audited Financial...

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