Chapter 17 - Test Bank - Chapter 17 - Auditors' Reports...

Chapter 17 - Test Bank
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Unformatted text preview: Chapter 17 - Auditors' Reports Chapter 17 Auditors' Reports True / False Questions 1. Audit reports should be dated the date on which sufficient appropriate audit evidence has been collected. True False 2. When the auditors are unable to comply with generally accepted auditing standards, they should issue an opinion that is unmodified, but include an additional emphasis of matter paragraph in the report. True False 3. When evaluating the results of audit tests, materiality depends upon both the dollar amount and the nature of the item. True False 4. A public company's financial statements should be prepared following standards of the Public Company Accounting Oversight Board. True False 5. If financial statements fail to disclose a material fact, the auditors may disclose the information in an emphasis of matter paragraph and, depending upon materiality, issue either a qualified opinion or adverse opinion on the statements. True False 17-1 Chapter 17 - Auditors' Reports 6. If financial statements contain a material departure from generally accepted accounting principles, the auditors usually should issue a disclaimer of opinion. True False 7. A change that the auditor agrees with from one generally accepted accounting principle to another generally accepted accounting principle that has a pervasive effect on net income usually results in an adverse opinion by the auditors. True False 8. When there is a significant question about a company's ability to remain a going concern, the report issued is usually unmodified with an emphasis of matter paragraph. True False 9. A client imposed scope limitation will generally result in a disclaimer of opinion, regardless of whether sufficient appropriate audit evidence is gathered using alternative procedures. True False 10. Regulation S-X governs the form and content of financial statements filed with the SEC. True False Multiple Choice Questions 11. Which of the following is not explicitly included in an audit report for a nonpublic company? A. A statement that the auditor believes that his or her audit provides a reasonable basis for expressing negative assurance. B. A statement that the auditor's responsibility is to express an opinion on the financial statements. C. A statement that the financial statements are the responsibility of management. D. A title with the word "independent." 17-2 Chapter 17 - Auditors' Reports 12. When an auditor has concluded there is substantial doubt about an entity's ability to continue as a going concern for a reasonable period of time beyond the current financial statement date ( 9/30/X1 ), the auditor's responsibility includes: A. Preparing prospective financial information to verify whether management's plans can be effectively implemented....
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