CPA Auditing and Attestation (AUD) › Audit Reports
Which statement is true regarding a compilation report?
Provides assurance that the financial statements are fairly presented
Requires the auditor to be independent
The accountant is required to comply with AR C 60 General Principles
Requires an assessment of the internal control environment
AR-C Section 60 of the identifies “General Principles for Engagements Performed in Accordance with Statements on Standards for Accounting and Review Services. Compilation Engagements are required to comply with this section.
Of the following factors, which should most influence an auditor’s decision to modify the audit opinion of an issuer’s financial statements?
The type of users expected to rely on the financial statements
Whether the auditor’s opinion is based in part on the report of another auditor
The effect of a misstatement on the financial statements taken as a whole
Uncertainties related to management’s estimates as of the reporting date that are adequately disclosed in the financial statements
The effect of a misstatement on the financial statements taken as a whole should most likely influence an auditor’s decision to modify the audit opinion.
John Ryan, CPA needs to research guidance for the engagement of his client. The client is a private unaudited non-issuer and wants a compilation completed. In which of the following sections of various literature sources would John find relevant guidance?
ET
AR-C
GAGAS
PCAOB
AR-C is a section of the AICPA's guidance on SSARS. As this engagement is a compilation for an unaudited non-issuer, it would be considered SSARS.
Which statement is true regarding a compilation report?
Provides assurance that the financial statements are fairly presented
Requires the auditor to be independent
The accountant is required to comply with AR C 60 General Principles
Requires an assessment of the internal control environment
AR-C Section 60 of the identifies “General Principles for Engagements Performed in Accordance with Statements on Standards for Accounting and Review Services. Compilation Engagements are required to comply with this section.
In the course of auditing Litmus, Inc., the auditors have uncovered a scheme by management to overvalue inventory in order to adhere to bond covenants. The firm approached management and indicated the practice would stop; however, they did not want to correct this year’s financial statements. The auditor should:
Correct the company financial statements and issue an unqualified opinion
Issue a disclaimer of opinion based on the misstatement
Issue and adverse opinion based on the material misstatement
Issue the unqualified opinion with the promise that the company will correct the practice next year.
According to AU-C Section 75: “ The auditor should express an adverse opinion when the auditor, having obtained sufficient appropriate audit evidence, concludes that misstatements, individually or in the aggregate, are both material and pervasive to the financial statements.”
An auditor of a non-issuer must conduct the audit in accordance with A) ASB Standards B) PCAOB Standards
A
B
Both
Neither
An auditor of a non-issuer must conduct the audit in accordance with ASB Standards.
An auditor of a non-issuer must conduct the audit in accordance with A) ASB Standards B) PCAOB Standards
A
B
Both
Neither
An auditor of a non-issuer must conduct the audit in accordance with ASB Standards.
Of the following factors, which should most influence an auditor’s decision to modify the audit opinion of an issuer’s financial statements?
The type of users expected to rely on the financial statements
Whether the auditor’s opinion is based in part on the report of another auditor
The effect of a misstatement on the financial statements taken as a whole
Uncertainties related to management’s estimates as of the reporting date that are adequately disclosed in the financial statements
The effect of a misstatement on the financial statements taken as a whole should most likely influence an auditor’s decision to modify the audit opinion.
In the course of auditing Litmus, Inc., the auditors have uncovered a scheme by management to overvalue inventory in order to adhere to bond covenants. The firm approached management and indicated the practice would stop; however, they did not want to correct this year’s financial statements. The auditor should:
Correct the company financial statements and issue an unqualified opinion
Issue a disclaimer of opinion based on the misstatement
Issue and adverse opinion based on the material misstatement
Issue the unqualified opinion with the promise that the company will correct the practice next year.
According to AU-C Section 75: “ The auditor should express an adverse opinion when the auditor, having obtained sufficient appropriate audit evidence, concludes that misstatements, individually or in the aggregate, are both material and pervasive to the financial statements.”
John Ryan, CPA needs to research guidance for the engagement of his client. The client is a private unaudited non-issuer and wants a compilation completed. In which of the following sections of various literature sources would John find relevant guidance?
ET
AR-C
GAGAS
PCAOB
AR-C is a section of the AICPA's guidance on SSARS. As this engagement is a compilation for an unaudited non-issuer, it would be considered SSARS.