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1
Q

Auditor expresses adverse opinion, the opinion paragraph should include…

A

A direct reference to separate paragraph disclosing basis for the opinion.

2
Q

What circumstances requires modification of the accountant’s report on a review of interim financial information of a publicly held entity prepared on the basis of generally accepted accounting principles?

A

Lack of adherence to generally accepted accounting principles and a lack of adequate disclosure

3
Q

An auditor performs a search for unrecorded liabilities to ascertain that all payables have been recored in the proper period. The search may be performed in each of the following areas.

A
  • Unmatched invoices and unbilled receiving reports.
  • Significant payments subsequent to the end of the
    period.
  • Unbilled professional fees at the end of period.
4
Q

What best describes a difference between a compilation of prospective financial statements and an examination of prospective financial statements?

A

A compilation does not contemplate the auditor providing any form of assurance whereas an examination does include assurance

5
Q

For all types of engagements under SSAE (Statements on standards for Attestation Engagements)

A

The CPA needs to be independent

6
Q

What is a requirement for accepting an attestation engagement to report on the controls of a service organization?

A

The service auditor has the competence and capability to perform the engagement.

7
Q

What of the following should be included in the workpaper documentation if risk factors are identified as being present?

A

Those risk factors identified

8
Q

If an auditor of a non-issuer discovers an unexpectedly high number of deviations during procedures performed on a sample to test management’s review and approval of time sheets, then the auditor would most appropriately:

A

Increase the assessed risks of a material misstatements

9
Q

Management should address written representation about a firm’s annual audit to the:

A

Auditor.
A written representation is a (written) statement by management provided to the auditor to confirm certain matters or to support other audit evidence

10
Q

If a non-issuer refuses to give permission to the auditor to communicate with its external legal counsel, then the auditor should modify the…

A

The opinion in the auditor’s report. They would issue a disclaimer of opinion. Alternatively decide to withdraw from the audit.

11
Q

A non-issuer engaged a practitioner to perform agreed-upon procedures on specific matters. The date of the report would ordinarily be determined by the occurrence of what event…

A

The completion of the agreed-upon procedures.

12
Q

An accountant should add an other-matter paragraph in the review report…

A

when the accountant considers it necessary to communicate a matter that is not presented or disclosed in the financials

13
Q

An accountant should add an emphasis-of-matter paragraph in the review report…

A

when the accountant considers it necessary to communicate a matter that is presented or disclosed in the financials

14
Q

An auditor who is unable to form an opinion on a new client’s operating inventory balances may issue an unmodified opinion on the current year’s…

A

Balance Sheet only.
Its at a point in time and can count the ending inventory whereas the Income statement is missing Beg. Inventory to calculate COGS

15
Q
  1. Must be communicated to management and the Audit Committee?
  2. Results in an Adverse Opinion of the Effectiveness of Internal Controls?
A
  1. Both significant deficiencies and material weaknesses.

2. Material weakness but not significant deficiencies.

16
Q

What would not be considered an attest engagement subject to attestation standards?

A

An engagement to review the financial statements of a non-public company.

17
Q

What type of sampling allows an auditor to quantify sampling risk?

A

Attribute sampling. Is a statistical approach used to test controls.

18
Q

A former client request a predecessor auditor to reissue the prior-years audit report in connection with the issuance of comparative financial statements by the client. What is the predecessor auditor’s responsibility?

A

Read current report, compare it to the previous report, and obtain a letter of representation from the successor auditor.

19
Q

A registered public accounting firm must make representations to the audit committee:

A

at least annually and prior to accepting the initial engagement.

20
Q

What is explicitly stated in the audit report expressing an unmodified opinion…

A

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.