Audit CPA || all solved.
The client did not furnish adequate evidence for the auditor to evaluate the internal controls over
inventory. All other evidence was provided. correct answers Issue a disclaimer of opinion
The auditors examined the client's internal controls over cash receipts and concluded that they
are operating exactly as designed. However, the design of the controls does not include control
procedures to prevent misstatements and the potential omission of cash receipts. correct answers
Determine if the control deficiency is a material weakness by obtaining further evidence
The auditors concluded that the ineffectiveness of the design of controls over accounts payable
and cash disbursements represents a material weakness in internal control even though the
financial statements are not materially misstated. correct answers Express an adverse opinion on
the internal controls
Management has not provided assurance that there are no material weaknesses in controls.
Subsequent tests revealed no material weaknesses. correct answers Express an unqualified
opinion on the internal controls
The auditor's prior-year report on internal control included an adverse opinion. the client has
since modified internal controls. No material weaknesses were found in the current year. correct
answers Express an unqualified opinion on the internal controls
The auditor receives an accounts receivable confirmation letter from one of the auditee's
customers selected for confirmation indicating that the identified balance of the customer's
account is correct as of December 31, 20X1. correct answers Existence
The company being audited has a checking account which requires that a minimum balance of
$100,000 must be maintained at all times. correct answers Rights and obligations
, In evaluating the entity's recorded Goodwill, the auditor determines that an impairment has
occurred which requires that a portion of the balance be written off as a loss. correct answers
Valuation and allocation
In performing the year-end "sales cutoff" procedures, the auditor identified several shipments of
merchandise in December 20X1 (terms were FOB-shipping point) that were not recorded as
sales until January 20X2. correct answers Completeness
The auditor observed the client's physical count of the inventory. correct answers Existence
The sufficiency of these procedures is solely the responsibility of the specified parties. correct
answers Agreed-Upon Procedures Report
In our opinion, the balance sheet referred to above presents fairly, in all material respects, the
financial position of ABC Company as of December 31, 20X1, in accordance with accounting
principles generally accepted in the United States of America. correct answers Unmodified Audit
Report for a Limited Reporting Engagement
Actual results in the future may differ materially from management's present assessment of this
information because events and circumstances frequently do not occur as expected. correct
answers Examination Report on Management's Discussion and Analysis
Which of the following matters would an auditor most likely communicate to an entity's audit
committee?
-A list of negative trends that may lead to working capital deficiencies and adverse financial
ratios.
-The level of responsibility assumed by management for the preparation of the financial
statements.
-Difficulties encountered in achieving a satisfactory response rate from the entity's customers in
confirming accounts receivables.
The client did not furnish adequate evidence for the auditor to evaluate the internal controls over
inventory. All other evidence was provided. correct answers Issue a disclaimer of opinion
The auditors examined the client's internal controls over cash receipts and concluded that they
are operating exactly as designed. However, the design of the controls does not include control
procedures to prevent misstatements and the potential omission of cash receipts. correct answers
Determine if the control deficiency is a material weakness by obtaining further evidence
The auditors concluded that the ineffectiveness of the design of controls over accounts payable
and cash disbursements represents a material weakness in internal control even though the
financial statements are not materially misstated. correct answers Express an adverse opinion on
the internal controls
Management has not provided assurance that there are no material weaknesses in controls.
Subsequent tests revealed no material weaknesses. correct answers Express an unqualified
opinion on the internal controls
The auditor's prior-year report on internal control included an adverse opinion. the client has
since modified internal controls. No material weaknesses were found in the current year. correct
answers Express an unqualified opinion on the internal controls
The auditor receives an accounts receivable confirmation letter from one of the auditee's
customers selected for confirmation indicating that the identified balance of the customer's
account is correct as of December 31, 20X1. correct answers Existence
The company being audited has a checking account which requires that a minimum balance of
$100,000 must be maintained at all times. correct answers Rights and obligations
, In evaluating the entity's recorded Goodwill, the auditor determines that an impairment has
occurred which requires that a portion of the balance be written off as a loss. correct answers
Valuation and allocation
In performing the year-end "sales cutoff" procedures, the auditor identified several shipments of
merchandise in December 20X1 (terms were FOB-shipping point) that were not recorded as
sales until January 20X2. correct answers Completeness
The auditor observed the client's physical count of the inventory. correct answers Existence
The sufficiency of these procedures is solely the responsibility of the specified parties. correct
answers Agreed-Upon Procedures Report
In our opinion, the balance sheet referred to above presents fairly, in all material respects, the
financial position of ABC Company as of December 31, 20X1, in accordance with accounting
principles generally accepted in the United States of America. correct answers Unmodified Audit
Report for a Limited Reporting Engagement
Actual results in the future may differ materially from management's present assessment of this
information because events and circumstances frequently do not occur as expected. correct
answers Examination Report on Management's Discussion and Analysis
Which of the following matters would an auditor most likely communicate to an entity's audit
committee?
-A list of negative trends that may lead to working capital deficiencies and adverse financial
ratios.
-The level of responsibility assumed by management for the preparation of the financial
statements.
-Difficulties encountered in achieving a satisfactory response rate from the entity's customers in
confirming accounts receivables.
