Auditing Test 1 UPDATED ACTUAL Exam
Questions and CORRECT Answers
Which of the following conditions or events most likely would cause an auditor to have
substantial doubt about an entity's ability to continue as a going concern? - CORRECT
ANSWER - Usual trade credit from suppliers is denied.
In which of the following circumstances would an auditor most likely add an emphasis-of-matter
paragraph to the report while not affecting the auditor's unmodified opinion? - CORRECT
ANSWER - There is substantial doubt about the entity's ability to continue as a going
concern.
Green CPA was engaged to audit the financial statements of Essex Co. after its fiscal year had
ended. The timing of Green's appointment as auditor and the start of fieldwork made
confirmation of accounts receivable by direct communication with the debtors ineffective.
However, Green applied other procedures and was satisfied as to the reasonableness of the
account balances. Greens auditor's report most likely contained a(n) - CORRECT
ANSWER - unmodified opinion
In which of the following situations would an auditor ordinarily choose between expressing an
"except for" qualified opinion or an adverse opinion? - CORRECT ANSWER - The
financial statements fail to disclose information that is required by generally accepted accounting
principles.
Under U.S. auditing standards, in which of the following situations would an auditor ordinarily
issue an unmodified audit opinion without an emphasis-of-matter paragraph. - CORRECT
ANSWER - The auditor decides to make reference to the audit of a component auditor as a
basis, in part, for the auditor's opinion.
An auditor concludes that there is substantial doubt about an entity's ability to continue as a
going concern for a reasonable period of time. If the entity's disclosures concerning this mater
are adequate, the audit report may include a(n) - CORRECT ANSWER - Disclaimer of
opinion - yes
Questions and CORRECT Answers
Which of the following conditions or events most likely would cause an auditor to have
substantial doubt about an entity's ability to continue as a going concern? - CORRECT
ANSWER - Usual trade credit from suppliers is denied.
In which of the following circumstances would an auditor most likely add an emphasis-of-matter
paragraph to the report while not affecting the auditor's unmodified opinion? - CORRECT
ANSWER - There is substantial doubt about the entity's ability to continue as a going
concern.
Green CPA was engaged to audit the financial statements of Essex Co. after its fiscal year had
ended. The timing of Green's appointment as auditor and the start of fieldwork made
confirmation of accounts receivable by direct communication with the debtors ineffective.
However, Green applied other procedures and was satisfied as to the reasonableness of the
account balances. Greens auditor's report most likely contained a(n) - CORRECT
ANSWER - unmodified opinion
In which of the following situations would an auditor ordinarily choose between expressing an
"except for" qualified opinion or an adverse opinion? - CORRECT ANSWER - The
financial statements fail to disclose information that is required by generally accepted accounting
principles.
Under U.S. auditing standards, in which of the following situations would an auditor ordinarily
issue an unmodified audit opinion without an emphasis-of-matter paragraph. - CORRECT
ANSWER - The auditor decides to make reference to the audit of a component auditor as a
basis, in part, for the auditor's opinion.
An auditor concludes that there is substantial doubt about an entity's ability to continue as a
going concern for a reasonable period of time. If the entity's disclosures concerning this mater
are adequate, the audit report may include a(n) - CORRECT ANSWER - Disclaimer of
opinion - yes
