Chap012

Chap012 - Chapter 12 Reports on Audited Financial Statements Chapter 12 Reports on Audited Financial Statements Multiple Choice Questions 1 The

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Unformatted text preview: Chapter 12 - Reports on Audited Financial Statements Chapter 12 Reports on Audited Financial Statements Multiple Choice Questions 1. The scope paragraph of the standard report on the entity's financial statements does not include the statement A. "In conformity with generally accepted accounting principles." B. "Audit provides a reasonable basis for an opinion." C. "An audit includes assessing the accounting principles used." D. "Perform the audit to obtain reasonable assurance." 2. The opinion paragraph of the auditors' report on the entity's financial statements either implicitly or explicitly incorporates all of the following standards, except that the A. Financial statements are presented in conformity with U.S. GAAP. B. Informative disclosures are adequate unless otherwise stated. C. Financial statements are management's responsibility. D. Report identifies circumstances in which principles have not been consistently observed. 3. Which of the following statements is not included in the scope paragraph of the standard report on the entity's financial statements? A. "Our responsibility is to express an opinion." B. "Standards require that we plan and perform the audit." C. "Our audit provides a reasonable basis for our opinion." D. "An audit includes examining, on a test basis, evidence of the amounts and disclosures." 4. Auditors are required to make consistency references in the auditors' report when there are changes in A. Accounting estimates. B. The format of the statement of cash flows. C. The classification of financial statement amounts. D. Accounting principles. 12-1 Chapter 12 - Reports on Audited Financial Statements 5. If financial statements contain a material but "compartmentalized" departure from FASB pronouncements, the auditors should render a(n) A. Qualified "except for" opinion with reference to departure. B. Adverse opinion with scope limitation reference. C. Adverse opinion with reference to departure. D. Disclaimer of opinion. 6. Auditors' reporting decisions on financial statements depend primarily on the A. Reporting principle. B. Sufficiency and appropriateness of evidence. C. Application of GAAP. D. Integrity of management. 7. When auditors are engaged to examine an entity's financial statements but decide to issue a disclaimer of opinion, the report would not A. Explain any departures from GAAP. B. Refer to any scope limitation. C. Include the standard scope paragraph. D. Discuss the fact that they were engaged to audit the financial statements. 8. An explanation of reliance on the reports of other auditors is an illustration of report departures referred to as A. Qualifications. B. Divisions of responsibility. C. Expansions of scope....
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This note was uploaded on 05/27/2011 for the course ACC 450 taught by Professor Null during the Spring '11 term at GWU.

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Chap012 - Chapter 12 Reports on Audited Financial Statements Chapter 12 Reports on Audited Financial Statements Multiple Choice Questions 1 The

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