chapt 3 unmodified opinon audit report with emphasis of matter explanator paragraph or nonstandard workding

Question 1

what are the 5 main causes of emphasis of matter paragraph or modifiction in wording of standard unmodified opinion audit report nder both AICPA and PCAOB?

Answer 1

1. lack of consistent application of GAAP 2. substantial doubt about being going concern 3. auditor agrees with departure from promulgated accounting principals 4. emphasis of other matters 5. reports involving other auditors

Question 2

Changes in consistency of appliing GAAP consist of (3)?

Answer 2

1. change in principals 2. change in reporting entities 3. correction of error involving principals

Question 3

what changes in comparability but not consistency dont need to be reported?

Answer 3

1. change in estimates 2. error correcdtions not involving principals…math 3. variation in format or presentation of financial info 4. changes because of substantiall different events like R&D and sale of subsididary

Question 4

what do emphasis of other matters include? (5)

Answer 4

1. important subsequence events to BS date 2. matters affecting comparability of FS to those of prior year 3. existence of material related party transactions 4. major catastrophre has or contrinues to have affect on financial position 5. Material uncertainties like litigation or regulatory action