Auditing Chapter 16 Quiz, Chapter 16-QUIZ-
Auditing Operations and Completing the Audit
Questions and Answers
If the auditor's opinion on the revised emphasis-of-matter paragraph
financial statements is different from
the previously issued audit report,
then a/an____ should be added to
the revised audit report.
If the auditor's opinion on the revised then an emphasis-of-matter paragraph should be
financial statements is different from added to the revised audit report after the opinion
the previously issued audit report, paragraph.
________.
The______states the auditor's opinion paragraph
opinion that the financial statements
are fairly presented, in all material
respects, in accordance with the
applicable financial reporting
framework.
If the client has a going concern then management must make a note disclosure
issue,____ _. about the circumstances, including any plans
management may have to mitigate the situation
,Audit standards require an emphasis- going concern
of-matter paragraph for___ and
consistency issues.
Performing audit procedures after impacts the dating of the audit report
the end of fieldwork___ _.
Whether auditors choose to dual written representation letter
date or extend the end of fieldwork,
they must obtain a/an___ from
management.
Eric's CPAs have recently completed The audit firm should extend audit procedures to
the audit of Sunglow Corporation. effectively audit this new information, and consider
Since the date of the audit report, it amending the audit opinion if necessary.
has come to light that significant
related party transactions had
occurred in the past year. As a result
of this finding, what should the audit
firm do?
In a compilation engagement,_____ _. the CPA will assist management in the presentation
of financial statements but will not provide
assurance as to whether the financial statements
are presented fairly in accordance with the
applicable financial reporting framework
AU-C 560 and AS 2905 state the first discuss the matter with the appropriate level of
step when responding to management and, if appropriate, those charged
subsequently discovered facts is to with governance
________.
,Dixon CPAs has been hired by a The auditor's liability in this scenario is confined to
local firm to perform a review of its limited assurance, which is less than the level of
financial statements. The partners of assurance offered as part of a regular audit
Dixon are meeting with the client's
management to discuss the
engagement and the CPA firm's
liability. Which of the following most
accurately describes this?
While walking across campus one Dual dating is best thought of as follows: There are
day after auditing class, Jeremiah and two dates shown on the audit report. The first date
Sandy are discussing the topic of relates to the end of fieldwork, whereas the
that day's lecture; dual dating. second date relates to a revision to the financial
Jeremiah asks Sandy if she can statements that occurred after the original
explain exactly how this works, as he fieldwork end date.
wasn't sure he fully understood the
way the professor explained it. Which
of the following represents Sandy's
most appropriate response to this?
Darren and Michaela are discussing a The audit firm is likely to include that the financial
current review engagement that the statements are the responsibility of management,
audit firm they work for is close to and will likely list the financial statements that the
completing. Darren asks Michaela to auditors reviewed.
give him some examples of items
that might be included in the
auditor's official report. Which of the
following most accurately describes
items that would likely be included in
the review report?
, At the conclusion of the audit of The auditors may decide to add an emphasis-of-
Sparrow Corporation, the external matter paragraph, to draw attention to this.
auditors determined that one of the
client's warehouses had been
destroyed due to a freak weather
event, resulting in the loss of millions
of dollars of inventory. What might
the auditors decide to do as a result
of this?
Jackie and Douglas are walking It is important that the financial statements are
across campus one day after their consistent, especially from one period to the next,
auditing class. Jackie mentions to as otherwise financial statement users might
Douglas that if financial statements misinterpret the numbers contained in those
are required to be presented statements
according to generally accepted
accounting principles, she doesn't
really follow why consistency is a big
deal. Which of the following
represents Douglas' most
appropriate response to this
comment?
Geoff and Heather are discussing the Yes, it's probably been included and would be
audit report that their firm recently categorized as a critical audit matter.
released on a major client. Geoff
notes that he wonders if their firm's
finding that the client had
unexplainably switched depreciation
methods which had caused various
depreciation expenses to be
understated on the income
statement would be noted in the
report. Which of the following is
Heather's best response to this?
Auditing Operations and Completing the Audit
Questions and Answers
If the auditor's opinion on the revised emphasis-of-matter paragraph
financial statements is different from
the previously issued audit report,
then a/an____ should be added to
the revised audit report.
If the auditor's opinion on the revised then an emphasis-of-matter paragraph should be
financial statements is different from added to the revised audit report after the opinion
the previously issued audit report, paragraph.
________.
The______states the auditor's opinion paragraph
opinion that the financial statements
are fairly presented, in all material
respects, in accordance with the
applicable financial reporting
framework.
If the client has a going concern then management must make a note disclosure
issue,____ _. about the circumstances, including any plans
management may have to mitigate the situation
,Audit standards require an emphasis- going concern
of-matter paragraph for___ and
consistency issues.
Performing audit procedures after impacts the dating of the audit report
the end of fieldwork___ _.
Whether auditors choose to dual written representation letter
date or extend the end of fieldwork,
they must obtain a/an___ from
management.
Eric's CPAs have recently completed The audit firm should extend audit procedures to
the audit of Sunglow Corporation. effectively audit this new information, and consider
Since the date of the audit report, it amending the audit opinion if necessary.
has come to light that significant
related party transactions had
occurred in the past year. As a result
of this finding, what should the audit
firm do?
In a compilation engagement,_____ _. the CPA will assist management in the presentation
of financial statements but will not provide
assurance as to whether the financial statements
are presented fairly in accordance with the
applicable financial reporting framework
AU-C 560 and AS 2905 state the first discuss the matter with the appropriate level of
step when responding to management and, if appropriate, those charged
subsequently discovered facts is to with governance
________.
,Dixon CPAs has been hired by a The auditor's liability in this scenario is confined to
local firm to perform a review of its limited assurance, which is less than the level of
financial statements. The partners of assurance offered as part of a regular audit
Dixon are meeting with the client's
management to discuss the
engagement and the CPA firm's
liability. Which of the following most
accurately describes this?
While walking across campus one Dual dating is best thought of as follows: There are
day after auditing class, Jeremiah and two dates shown on the audit report. The first date
Sandy are discussing the topic of relates to the end of fieldwork, whereas the
that day's lecture; dual dating. second date relates to a revision to the financial
Jeremiah asks Sandy if she can statements that occurred after the original
explain exactly how this works, as he fieldwork end date.
wasn't sure he fully understood the
way the professor explained it. Which
of the following represents Sandy's
most appropriate response to this?
Darren and Michaela are discussing a The audit firm is likely to include that the financial
current review engagement that the statements are the responsibility of management,
audit firm they work for is close to and will likely list the financial statements that the
completing. Darren asks Michaela to auditors reviewed.
give him some examples of items
that might be included in the
auditor's official report. Which of the
following most accurately describes
items that would likely be included in
the review report?
, At the conclusion of the audit of The auditors may decide to add an emphasis-of-
Sparrow Corporation, the external matter paragraph, to draw attention to this.
auditors determined that one of the
client's warehouses had been
destroyed due to a freak weather
event, resulting in the loss of millions
of dollars of inventory. What might
the auditors decide to do as a result
of this?
Jackie and Douglas are walking It is important that the financial statements are
across campus one day after their consistent, especially from one period to the next,
auditing class. Jackie mentions to as otherwise financial statement users might
Douglas that if financial statements misinterpret the numbers contained in those
are required to be presented statements
according to generally accepted
accounting principles, she doesn't
really follow why consistency is a big
deal. Which of the following
represents Douglas' most
appropriate response to this
comment?
Geoff and Heather are discussing the Yes, it's probably been included and would be
audit report that their firm recently categorized as a critical audit matter.
released on a major client. Geoff
notes that he wonders if their firm's
finding that the client had
unexplainably switched depreciation
methods which had caused various
depreciation expenses to be
understated on the income
statement would be noted in the
report. Which of the following is
Heather's best response to this?
