ch12Student: ___________________________________________________________________________1.The first paragraph of the standard report on the entity's financial statements is referred to as the scope paragraph. True False2.The introductory paragraph of the auditors' report indicates that an audit has been conducted and identifies the financial statements the auditors examined. True False3.If auditors cannot apply specific auditing procedures during the examination, the opinion paragraph in the report must be qualified. True False4.The scope paragraph of the auditors' report contains a general description of the audit work and reference to standards of the Public Company Accounting Oversight Board. True False5.The introductory paragraph of the auditors' report identifies management's responsibility for the financial statements. True False6.Rule 203 allows auditors to issue an unqualified opinion on the entity's financial statements even when these financial statements contain a departure from an FASB standard. True False7.When the financial statements contain a departure from GAAP, the auditors must render an adverse opinion on the entity's financial statements. True False8.An adverse opinion indicates that the financial statements are not presented in conformity with GAAP. True False9.When there is a material departure from GAAP, auditors may issue either an adverse opinion or disclaimer of opinion on the entity's financial statements. True False10.The auditors' report references the consistent application of accounting principles only when the entity has changed accounting principles. True False11.If group auditors choose to rely on the work of component auditors, the group auditors must refer to the component auditors in their report by name. True False12.If the audit scope is restricted in some specific respect, but sufficient appropriate evidence is gathered by performing other procedures, the standard scope paragraph of the report need not be modified. True False13.Auditors are not responsible for determining whether there is a substantial doubt about an entity's ability to continue as a going concern. True False
14.In all cases in which auditors are associated by name or participation with unaudited financial statements of public entities, the auditors must issue a disclaimer of opinion. True False15.When a division of responsibility is noted in the auditors' report on group financial statements, the introductory paragraph would be modified. True False16.If a justified departure from GAAP exists, auditors would issue an unqualified opinion but would modify the scope paragraph to describe the departure and its monetary effects. True False17.The auditors' report should be dated as of the date of the client's financial statements. True False18.If predecessor auditors had examined comparative financial statements, those auditors' reports must be presented along with the auditors' report.
- Spring '12
- Balance Sheet, opinion, Auditor's report