Exam (elaborations)
Chapter 12 Pre-Builts
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Chapter 12 Pre-Builts
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Chapter 12 Pre-BuiltsAfter completing a financial statement audit, the auditor needs to assess the situation to
determine the proper type of report to issue. Expressing an independent opinion on the
fairness of financial statements is an attestation service most frequently provided by
auditors. The opinion is expressed in the auditors' report.
1. Auditors have obtained sufficiently appropriate evidence to conclude that the financial
statements are not materially misstated.
2. Auditors have doubt about a company's ability to continue as a going concern.
3. The client has elected to not follow GAAP.
4. A material misstatement is considered pervasive.
5. Auditors determine that the possible effects on the financial statements of the inability
to obtain sufficient evidence (i.e. a scope limitation) could be both material and
pervasive. - ANS-1. Unmodified Opinion
2. Unqualified Opinion with an Emphasis-of-Matter Paragraph
3. Adverse Opinion
4. Adverse Opinion
5. Disclaimer of Opinion
CONCEPT REVIEW:
Audit reports can be unmodified or modified. A report with an unmodified opinion may
be a "standard report" or can include an emphasis-of-matter paragraph. A modified
report can have an extra explanatory paragraph in connection with a qualified opinion,
adverse opinion, or disclaimer of opinion.
1.Auditors an opinion when they are unable to form an opinion.
2.Limitations on the scope of an audit may create a situation in which the auditors are
unable to obtain sufficient .
3.Qualified opinions are issued when the financial statements are misstated.
4.When there is significant doubt as to the ability to continue as a going concern, a(n)
paragraph may be added.
5.A(n) opinion is appropriate if a material misstatement is considered pervasive. -
ANS-1. Disclaims
2. Evidence
3. Materially
4. Emphasis-of-matter
5. Adverse
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