DeVry ACCT444 Week 7 Quiz (2016) Score 100%
Question
1. Question :
(TCO 2) When a misstatement in the financial statements exists, but is unlikely to affect the decisions of a reasonable user, it would be appropriate to issue
an unqualified opinion.
a qualified opinion.
an adverse opinion.
a disclaimer of opinion.
Question 2. Question :
(TCO 2) When a client has not applied GAAP consistently from the prior year to the current year, the auditor does not concur with the appropriateness of the change, and the change in GAAP has a material effect on the financial statements, the auditor should issue a(n)
disclaimer.
adverse opinion.
unqualified opinion.
qualified opinion.
Question 3. Question :
(TCO 2) When qualifying an opinion because of an insufficiency of audit evidence, an auditor should refer to the situation in the:
Auditor’s Responsibility Paragraph
Notes to the Financial Statements
Yes
Yes
Auditor’s Responsibility Paragraph
Notes to the Financial Statements
Yes
No
Auditor’s Responsibility Paragraph
Notes to the Financial Statements
No
Yes
Auditor’s Responsibility Paragraph
Notes to the Financial Statements
No
No
Question 4. Question :
(TCO 2) Jules, CPA, is reporting on comparative financial statements, but Shah, CPA conducted the previous year’s audit. Which of the following is not true in this situation?
Dual dating may be used to indicate the appropriate dates for each audit.
If Shah’s report is not presented, an other-matter paragraph should be included to describe this situation.
If Shah’s report was qualified due to a scope limitation, Jules may still issue an unmodified opinion on the current year’s financial statements.
If Shah’s report will be presented, management will need to provide a representation letter to Shah.
Question 5. Question :
(TCO 11) Which of the following is not a purpose of the client letter of representation?
To impress upon the audit firm its responsibility for the audit
To impress upon management its responsibility for the financial statement assertions
To remind management of potential misstatements or omissions in the financial statements
To document the responses from management to inquiries about various aspects of the audit
Question 6. Question :
(TCO 2) Under U.S. auditing standards, when an auditor believes there is substantial doubt about the ability of an entity to continue as a going concern, all of the following should be included in the audit documentation, except:
The conditions that gave rise to the substantial doubt.
The auditor’s conclusion about whether substantial doubt remains or is alleviated.
Management’s conclusion regarding whether substantial doubt remains or is alleviated.
The effect of the auditor’s conclusion on the auditor’s report.
Question 7. Question :
(TCO 2) Which of the following statements is a basic element of the auditor’s report under U.S. auditing standards?
The disclosures provide reasonable assurance that the financial statements are free of material misstatement.
The auditor evaluated the overall internal control.
An audit includes evaluating significant estimates made by management.
The financial statements are consistent with those of the prior period.
Question 8. Question :
(TCO 11) The audit step most likely to reveal the existence of contingent liabilities is
a review of vouchers paid during the month following the year-end.
accounts payable confirmations.
mortgage-note confirmation.
an inquiry directed to legal counsel.
Question 9. Question :
(TCO 2) In which type of report would you read the following statement: “We believe that our examination provides a reasonable basis for our opinion.”?
Review
Audit
Examination
Agreed-upon procedures
Question 10. Question :
(TCO 2) Which of the following reporting options is least likely with regard to supplementary information that is required by GAAP?
The auditor’s report on the financial statements includes an other-matter paragraph stating that the auditor has applied the required procedures.
A disclaimer of opinion is issued on supplementary information.
The auditor’s report on the financial statements includes both an opinion on the supplementary information and a statement restricting the use of the report.
The auditor’s report on the financial statements includes an opinion regarding whether the supplementary information is fairly stated in all material respects in relation to the financial statements taken as a whole.
