B communicating key audit matters provides additional

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B. Communicating key audit matters provides additional information to intended users of the financial statements to assist them in understanding those matters that, in the auditor’s professional judgment, were of most significance in the audit of the financial statements of the current and prior period/s. C. Communicating key audit matters may assist intended users in understanding the entity and areas of significant management judgment in the audited financial statements. D. The auditor’s determination of key audit matters is limited to those matters of most significance in the audit of the financial statements of the current period, even when comparative financial statements are presented. 118. Communicating key audit matters in the auditor’s report is I. A substitute for disclosures in the financial statements. II. A substitute for the auditor’s expression of a modified opinion. III. A substitute for reporting in accordance with PSA 570 (Revised) when a material uncertainty exists relating to the entity’s ability to continue as a going concern IV. A separate opinion on individual matters. A. I and II B. III only C. I, III and IV D. Neither I, II, III and IV Page 21 119. PSA 705 (Revised), Modification to the Opinion in the Independent Auditor’s Report, prohibits the auditor from communicating key audit matters when the auditor expresses a/an A. Unmodified opinion. B. Qualified opinion. C. Adverse opinion. D. Disclaimer of opinion. 120. The following statements relate to the date of the auditor’s report. Which is false? A. The auditor should date the report as of the completion date of the audit. B. The date of the auditor’s report should not be earlier than the date on which the financial statements are signed or approved by management.
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C. The date of the auditor’s report should not be later than the date on which the financial statements are signed or approved by management. D. The date of the auditor’s report should always be later than the date of the financial statements (i.e., the balance sheet date). 121. An independent auditor discovers that a payroll supervisor of the company being audited has misappropriated P50,000. The company’s total assets and income before tax are P70 million and P15 million, respectively. Assuming no other issues affect the report, the auditor’s report will most likely contain a/an A. Unmodified opinion B. Disclaimer of opinion C. Adverse opinion. D. Scope qualification 122. A note to the financial statements of the Prudent Bank indicates that all of the records relating to the bank’s business operations are stored on magnetic disks, and that no emergency backup systems or duplicate disks are stored because the bank and its auditors consider the occurrence of a catastrophe to be remote. Based upon this note, the auditor’s report should express A. A qualified opinion B. An unmodified opinion C. An adverse opinion D. A “subject to” opinion 123. Which of the following terms is used in the standard to describe the effects on the financial statements of misstatements or the possible effects on the financial statements, if any, that are undetected due to an inability to obtain sufficient appropriate audit evidence?
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