ACCT3101 TOPIC 2 QUESTIONS - Topic 2 Tutorial Question

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ACCT3101 topic 2.10 (Objectives 4, 5) List the three conditions requiring a departure from an unqualified opinion and give one specific example of each of those conditions. 2.20 (Objectives 4, 5, 6, 7) The following questions deal with types of audit reports. Choose the best response. A When an auditor issues an audit report referring to a material uncertainty, the reader of the auditor’s report should conclude that (1) the auditor was not able to form an opinion on the financial statements taken as a whole (2) the uncertainty occurred after the financial report date but prior to the audit report date (3) there were no audit procedures available to the auditor by which he or she could obtain satisfaction concerning the uncertainty (4) the ability of the company to continue as a going concern is questionable. B An auditor will issue an adverse opinion if (1) the scope of the examination is limited by the client (2) the exception to the fairness of presentation is so material that a qualified opinion is not justified (3) he or she did not perform sufficient auditing procedures to form an opinion on the financial statements taken as a whole (4) major uncertainties exist concerning the company’s future. C An auditor will express A QUALIFIED opinion if (1) management refuses to provide for doubtful debts that are material (2) a significant uncertainty affecting the client has been disclosed adequately in the notes (3) the auditor agrees with the need to disclose further information in the notes concerning the effect of compliance with accounting standards on the presentation of a true and fair view (4) the company has expensed the cost of purchasing supplies in the current year, although there are still some supplies on hand. D Under which of the following set of circumstances might an auditor issue A DICLAIMER of opinion? 5a4f54df0975d778d1c4e1e1ddd38e34cd25ed44.doc
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(1) The financial statements contain a departure from accounting standards, the effect of which is material. (2) Following the discovery of a subsequent event after the issue of the financial report, a revised financial report is to be issued. (3) There has been a material change between periods in the method of the application of accounting policies. (4) There are significant uncertainties affecting the financial statements owing to the lack of adequate accounting records. (AICPA adapted) 2.22 (Objectives 4, 5, 6, 7, 8) For the following independent situations, assume you are the audit partner on the engagement: 1 During your examination of Debold Batteries, you conclude there is a possibility that inventory is materially overstated. Management refuses to allow you to expand the scope of your examination sufficiently to verify whether the balance is actually misstated. 2 You are auditing Woodcolt Linen Services for the first time. Woodcolt has been in
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This note was uploaded on 08/24/2010 for the course ACCT 3101 taught by Professor Drmarcsim during the Two '09 term at Queensland.

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ACCT3101 TOPIC 2 QUESTIONS - Topic 2 Tutorial Question

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