Audit 1 Module 7 - Emphasis Of Matter, Other Matter, Explanatory Paragraphs

Question 1

Emphasis of matter paragraph requirements

Answer 1

1. it is placed immediately after the opinion paragraph
2. Use the heading “emphasis of matter “
3. Describe the matter being emphasized in the location of relevant disclosures about the matter in the financial statements
4. Indicate that the auditor’s opinion is not modified with respect to the matter emphasized

Question 2

Emphasis of matter paragraph is required in the following circumstances (GAASP)

Answer 2

Going concern
change in ACCOUNTING principle
change in AUDIT opinion
SPECIAL PURPOSE

Question 3

Emphasis of matter to nonissuer is _____ to issuer

Answer 3

Explanatory

Question 4

The following situations require an emphasis of matter | explanatory paragraph

Answer 4

• change of accounting estimate that’s inseparable from change in acct principle (change in depr. Method)
• corrections of an error in acct principle (from cash method to actual method)
• change in reporting entity
• correction of a material misstatement in previously issued fs

Question 5

Use of emphasis of matter, other matter, or explanatory paragraphs still represent an ______ opinion

Answer 5

Unmodified | unqualified

Question 6

Which of the following events would an auditor issue a report that omits any reference to consistency?

Answer 6

Change in the useful life used to calculate the provision for depr. Expense