FAC1503 ASS 2 FULL QUESTIONS AND
CORRECT ANSWERS GRADED A PLUS
BUNDLE
●● What triggers a QUALIFIED opinion due to a MISSTATEMENT?
Answer: Material misstatement that is NOT pervasive.
●● What language is used in a qualified opinion for a misstatement?
Answer: "except for THE EFFECTS"
●● What triggers a QUALIFIED opinion due to a SCOPE
LIMITATION?
Answer: Scope limitation that is NOT pervasive.
●● What language is used in a qualified opinion for a scope limitation?
Answer: "except for ADJUSTMENTS, IF ANY"
●● What triggers an ADVERSE opinion?
Answer: Material misstatement that IS pervasive.
●● What does an adverse opinion say about the FS?
Answer: "The financial statements do NOT present fairly..."
,●● What triggers a DISCLAIMER (reason 1)?
Answer: Pervasive scope limitation.
●● What triggers a DISCLAIMER (reason 2)?
Answer: Auditor is not independent.
●● Is reliance on another auditor a reason for an explanatory paragraph?
Answer: YES — without changing the opinion.
●● Is going concern doubt a reason for an explanatory paragraph?
Answer: YES — without changing the opinion.
●● Is a change in accounting principle a reason for an explanatory
paragraph?
Answer: YES — without changing the opinion.
●● Is an emphasis-of-matter paragraph required or optional?
Answer: OPTIONAL — used to draw attention to important events.
●● What is a Critical Audit Matter (CAM)?
, Answer: A matter from the current audit, communicated to the audit
committee, involving especially challenging, subjective, or complex
auditor judgment.
●● Do CAMs change the auditor's opinion?
Answer: NO.
●● What is a Type 1 subsequent event?
Answer: An event providing evidence about conditions EXISTING at
the BS date. Requires FS adjustment.
●● What is a Type 2 subsequent event?
Answer: An event NOT providing evidence about conditions at the BS
date. May require footnote disclosure only.
●● When should the audit report be dated?
Answer: No earlier than the date the auditor obtained sufficient
appropriate evidence (end of fieldwork).
●● What is dual-dating?
Answer: Original report date stays as primary; a second date is added
only for procedures on a subsequent event.
●● Why dual-date instead of redating the whole report?
CORRECT ANSWERS GRADED A PLUS
BUNDLE
●● What triggers a QUALIFIED opinion due to a MISSTATEMENT?
Answer: Material misstatement that is NOT pervasive.
●● What language is used in a qualified opinion for a misstatement?
Answer: "except for THE EFFECTS"
●● What triggers a QUALIFIED opinion due to a SCOPE
LIMITATION?
Answer: Scope limitation that is NOT pervasive.
●● What language is used in a qualified opinion for a scope limitation?
Answer: "except for ADJUSTMENTS, IF ANY"
●● What triggers an ADVERSE opinion?
Answer: Material misstatement that IS pervasive.
●● What does an adverse opinion say about the FS?
Answer: "The financial statements do NOT present fairly..."
,●● What triggers a DISCLAIMER (reason 1)?
Answer: Pervasive scope limitation.
●● What triggers a DISCLAIMER (reason 2)?
Answer: Auditor is not independent.
●● Is reliance on another auditor a reason for an explanatory paragraph?
Answer: YES — without changing the opinion.
●● Is going concern doubt a reason for an explanatory paragraph?
Answer: YES — without changing the opinion.
●● Is a change in accounting principle a reason for an explanatory
paragraph?
Answer: YES — without changing the opinion.
●● Is an emphasis-of-matter paragraph required or optional?
Answer: OPTIONAL — used to draw attention to important events.
●● What is a Critical Audit Matter (CAM)?
, Answer: A matter from the current audit, communicated to the audit
committee, involving especially challenging, subjective, or complex
auditor judgment.
●● Do CAMs change the auditor's opinion?
Answer: NO.
●● What is a Type 1 subsequent event?
Answer: An event providing evidence about conditions EXISTING at
the BS date. Requires FS adjustment.
●● What is a Type 2 subsequent event?
Answer: An event NOT providing evidence about conditions at the BS
date. May require footnote disclosure only.
●● When should the audit report be dated?
Answer: No earlier than the date the auditor obtained sufficient
appropriate evidence (end of fieldwork).
●● What is dual-dating?
Answer: Original report date stays as primary; a second date is added
only for procedures on a subsequent event.
●● Why dual-date instead of redating the whole report?
