Unit 4 - D251 Advanced Auditing questions with verified
answers
All audit reports issued under the guidance of ISA 701, Communicating Key Audit
Matters in the Independent Auditor's Report, will include one or more KAMs.
Ans✓✓✓ False
As part of identifying CAMs, which of the following factors would an auditor
consider when determining whether a matter involved especially challenging,
subjective, or complex auditor judgment?
a. The auditor's assessment of the risks of material misstatement, including
significant risks.
b. The nature and timing of significant unusual transactions and the extent of
audit effort and judgment related to requisite transactions.
c. The degree of auditor subjectivity in applying audit procedures to address the
matter or in evaluating the results of those procedures.
d. The auditor would consider all of the above factors. Ans✓✓✓ d. The auditor
would consider all of the above factors.
Audit reports are designed to promote clear communication between the auditor
and the financial statement user.
What is delineated in the audit report?
a. The experience level of the audit team
, b. The results of the previous year's audit
c. The relative responsibilities of the client and the auditor
d. The client's opinion on the fairness of the financial statements Ans✓✓✓ c. The
relative responsibilities of the client and the auditor
Eagle Company's financial statements contain a departure from GAAP because,
due to unusual circumstances, the statements would otherwise be misleading.
Which of the following is descriptive of the type of audit report the auditor should
provide?
a. Unqualified opinion, with no mention of the departure in the auditor's report.
b. Unqualified opinion, with a description of the departure in the audit report.
c. Either a or b
d. Neither a nor b Ans✓✓✓ b. Unqualified opinion, with a description of the
departure in the audit report.
If an auditor decides to include additional language in the audit report because of
concerns about the client's ability to remain a going concern, the additional
language should include the terms material doubt and going concern. Ans✓✓✓
False
answers
All audit reports issued under the guidance of ISA 701, Communicating Key Audit
Matters in the Independent Auditor's Report, will include one or more KAMs.
Ans✓✓✓ False
As part of identifying CAMs, which of the following factors would an auditor
consider when determining whether a matter involved especially challenging,
subjective, or complex auditor judgment?
a. The auditor's assessment of the risks of material misstatement, including
significant risks.
b. The nature and timing of significant unusual transactions and the extent of
audit effort and judgment related to requisite transactions.
c. The degree of auditor subjectivity in applying audit procedures to address the
matter or in evaluating the results of those procedures.
d. The auditor would consider all of the above factors. Ans✓✓✓ d. The auditor
would consider all of the above factors.
Audit reports are designed to promote clear communication between the auditor
and the financial statement user.
What is delineated in the audit report?
a. The experience level of the audit team
, b. The results of the previous year's audit
c. The relative responsibilities of the client and the auditor
d. The client's opinion on the fairness of the financial statements Ans✓✓✓ c. The
relative responsibilities of the client and the auditor
Eagle Company's financial statements contain a departure from GAAP because,
due to unusual circumstances, the statements would otherwise be misleading.
Which of the following is descriptive of the type of audit report the auditor should
provide?
a. Unqualified opinion, with no mention of the departure in the auditor's report.
b. Unqualified opinion, with a description of the departure in the audit report.
c. Either a or b
d. Neither a nor b Ans✓✓✓ b. Unqualified opinion, with a description of the
departure in the audit report.
If an auditor decides to include additional language in the audit report because of
concerns about the client's ability to remain a going concern, the additional
language should include the terms material doubt and going concern. Ans✓✓✓
False
