Auditing standards - Audit 456 - Fall 2008 - Chapter 3...

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1. Auditing standards require that the audit report must be titled and that the title must: a. include the word “independent.” b. indicate if the auditor is a CPA. c. indicate if the auditor is a proprietorship, partnership, or incorporated. d. not include any discriminatory language. 2. The purpose of the introductory paragraph in the standard unqualified report is: a. to identify the entity that was audited. b. to identify the financial statements that were audited and the dates and time periods covered by the report. c. to communicate the responsibilities of management in preparing the financial statements and to clarify the respective roles of management and the auditor. d. all of the above. 3. The scope paragraph of the standard unqualified audit report states that the audit is designed to: a. discover all errors and/or irregularities. b. discover material errors and/or irregularities. c. conform to generally accepted accounting principles. d. obtain reasonable assurance whether the statements are free of material misstatement. 4. Which of the following is not an essential condition for issuing the standard unqualified audit opinion? a. All statements are included in the financial statements. b. The general standards have been followed in all respects. c. The financial statements are prepared in accordance with regulatory principles. d. Sufficient appropriate audit evidence has been accumulated. 5. The audit report date on a standard unqualified report indicates: a. the last day of the fiscal period. b. the date on which the financial statements were filed with the Securities and Exchange Commission. c. the last date on which users may institute a lawsuit against either client or auditor. d. the last day of the auditor’s responsibility for the review of significant events that occurred subsequent to the date of the financial statements. 6. An adverse opinion is issued when the auditor believes: a. some parts of the financial statements are materially misstated or misleading. b. the financial statements would be found to be materially misstated if an investigation were performed. c. the auditor is not independent. d. the overall financial statements are so materially misstated that they do not present fairly the financial position or results of operations and cash flows in conformity with GAAP. 7. A disclaimer of opinion may be issued in which of the following instances? a. The auditor has doubts related to an entity’s ability to continue as a going concern. b. There are highly material misstatements in the financial statements. c. The auditor’s scope has been restricted due to circumstances beyond the client’s control. d.
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This note was uploaded on 09/11/2011 for the course ACCT 320 taught by Professor Main during the Spring '11 term at American University of Beirut.

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Auditing standards - Audit 456 - Fall 2008 - Chapter 3...

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