AUD REAL EXAM AND BEST STUDY GUIDE 200 QUESTIONS AND CORRECT ANSWERS//ALREADY GRADED A+
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AUD 2024-2025
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AUD 2024-2025
AUD REAL EXAM AND BEST STUDY
GUIDE 200 QUESTIONS AND CORRECT
ANSWERS//ALREADY GRADED A+
AUD REAL EXAM AND BEST STUDY
GUIDE 200 QUESTIONS AND CORRECT
ANSWERS//ALREADY GRADED A+
AUD 2024-2025 REAL EXAM AND BEST STUDY
GUIDE 200 QUESTIONS AND CORRECT
ANSWERS//ALREADY GRADED A+
An examination of a financial forecast is a professional service that involves: - CORRECT ANSWER-
Evaluating the preparation of a financial forecast and the support underlying management's
assumptions.
When financial statements contain a departure from U.S. GAAP because, due to unusual circumstances,
the statements would otherwise be misleading, the auditor should express an opinion that is: - CORRECT
ANSWER-Unmodified
When circumstances indicate that a financial presentation in accordance with U.S. GAAP would be
misleading, a departure from U.S. GAAP is permissible. In such cases, the auditor should issue an
unmodified opinion because the financial statements are not materially misstated.
The opinion paragraph in an auditor's report for a nonissuer should include a statement that: - CORRECT
ANSWER-The opinion paragraph in an auditor's report should include a statement regarding the
auditor's opinion and an indication of the applicable financial reporting framework and its origin.
In which of the following sections of an auditor's report for a nonissuer does an auditor communicate
the nature of the engagement and the specific financial statements covered by the audit? - CORRECT
ANSWER-Opinion
Riley, a CPA firm, is performing an audit in accordance with U.S. generally accepted auditing standards.
Riley's client is Michelson Inc., a U.S.-based company that has identified U.S. generally accepted
accounting principles as the applicable financial reporting framework. In which sections of the auditor's
report should Riley refer to U.S. generally accepted accounting principles (GAAP)? - CORRECT ANSWER-
Opinion and Management's Responsibility
Which of the following items is explicitly included in an audit report expressing an unmodified opinion? -
CORRECT ANSWER-We identify and assess the risks of material misstatements of the financial
statements, whether due to fraud or error, and design and perform audit procedures responsive to
those risks.
,In an audit of an issuer, an auditor is least likely to include which of the following information related to
a critical audit matter in the audit report? - CORRECT ANSWER-A statement that disclaims the auditor's
responsibility for critical audit matters.
In which case would an unmodified opinion not be appropriate? - CORRECT ANSWER-A material related
party transaction has occurred and has been accounted for appropriately, but it has not been
adequately disclosed in the financial statements.
Which of the following situations best describes when an auditor should express an adverse opinion? -
CORRECT ANSWER-The auditor obtained sufficient appropriate audit evidence that concludes that
misstatements are both material and pervasive to the financial statements.
A client has capitalizable leases but refuses to capitalize them in the financial statements. Which of the
following reporting options does an auditor have if the amounts pervasively distort the financial
statements? - CORRECT ANSWER-Adverse opinion
An auditor most likely would issue an adverse opinion due to: - CORRECT ANSWER-Inadequate
disclosure of material information.
Under which of the following circumstances would the expression of a disclaimer of opinion be
inappropriate? - CORRECT ANSWER-Management does not provide reasonable justification for a change
in accounting principles.
When an auditor of a nonissuer expresses an adverse opinion, the Opinion section should include: -
CORRECT ANSWER-A direct reference to a separate section disclosing the basis for the opinion.
If a publicly held company issues financial statements that purport to present its financial position and
results of operations but omits the statement of cash flows, the auditor ordinarily will express a(an): -
CORRECT ANSWER-Qualified opinion
An auditor most likely would issue a disclaimer of opinion because of: - CORRECT ANSWER-
Management's refusal to furnish written representations.
,A limitation on the scope of an audit sufficient to preclude an unmodified opinion will usually result
when management: - CORRECT ANSWER-Is unable to obtain audited financial statements supporting the
entity's investment in a foreign subsidiary.
An auditor was unable to obtain sufficient appropriate audit evidence concerning certain transactions
due to an inadequacy in the entity's accounting records. The auditor would choose between issuing
a(an): - CORRECT ANSWER-Disclaimer of opinion and a qualified opinion
When an auditor of a nonissuer qualifies an opinion because of the inability to confirm accounts
receivable by direct communication with debtors, the wording of the qualified opinion paragraph of the
auditor's report should indicate that the qualification pertains to the: - CORRECT ANSWER-Possible
effects on the financial statements
For which of the following events would an auditor issue a report that omits any reference to
consistency? - CORRECT ANSWER-A change in the useful life used to calculate the provision for
depreciation expense.
An auditor most likely would add an other-matter paragraph when: - CORRECT ANSWER-An auditor
would add an other-matter paragraph when current period financial statements are audited and
presented in comparative form with compiled or reviewed financial statements from the prior period or
in comparative form with prior period financial statements that were not audited, reviewed, or
compiled.
In which of the following should an auditor's report for a nonissuer refer to the lack of consistency when
there is a justified change in accounting principle that is significant? - CORRECT ANSWER-An emphasis-
of-matter paragraph.
The group auditor decides not to refer to the component auditor who audited a subsidiary of the group
auditor's client. In this situation, the group auditor most likely would: - CORRECT ANSWER-Determine
the type of work to be performed by the group auditor on the financial information of the component.
Before a predecessor auditor reissues the prior year's audit report on the financial statements of a
former client for inclusion with the successor auditor's report on comparative financial statements, the
predecessor does all of the following except: - CORRECT ANSWER-Review the audit documentation of
the successor auditor.
, An entity's comparative financial statements include the financial statements of the prior year that were
audited by a predecessor auditor whose report is not presented. If the predecessor's report was
qualified, the successor should: - CORRECT ANSWER-1. That the statements were audited by a
predecessor auditor. The predecessor auditors should not be named unless the practice of the
predecessors was acquired by or merged with that of the successor.
2. The type of opinion expressed by the predecessor auditor and, if the opinion was modified, the
reason for the modification.
3. The nature of any emphasis-of-matter, other-matter, or explanatory paragraph included in the
predecessor auditor's report.
4. The date of the predecessor auditor's report.
If a component auditor does not meet the independence requirements that are relevant to a group
audit of a nonissuer's financial statements, then the group engagement team should first: - CORRECT
ANSWER-the group engagement team should first attempt to obtain sufficient appropriate audit
evidence relating to the financial information of the component without making reference to or using
the work of the component auditor.
When a group engagement partner decides to make reference to a component auditor's audit under
U.S. GAAS, the group engagement partner's report should state "We did not audit the financial
statements of X Company..." in which section of the audit report? - CORRECT ANSWER-Opinion
When reporting on comparative financial statements, an auditor ordinarily should change the previously
issued opinion on the prior year's financial statements if the: - CORRECT ANSWER-Prior year's financial
statements are restated to conform with generally accepted accounting principles.
Which of the following procedures would most likely help an auditor identify events after the date of
the financial statements that should be disclosed? - CORRECT ANSWER-Inquire about changes in capital
stock that was issued or repurchased.
An auditor is engaged to report on supplemental information that accompanies audited financial
statements. The auditor's report on supplemental information should include: - CORRECT ANSWER-A
statement that the supplemental information has been subjected to audit procedures performed in
conjunction with the audit of the financial statements.
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