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Chapter 17
Auditors' Reports
True / False Questions
1. Audit reports should be dated the date on which the financial statements are issued.
True False
2. When the auditors are unable to comply with generally accepted auditing standards, they should issue an opinion that is unqualified, but include an additional explanatory paragraph in the report.
True False
3. When evaluating the results of audit tests, materiality depends upon both the dollar amount and the nature of the item.
True False
4. A public company's financial statements should be prepared following standards of the Public Company Accounting Oversight Board.
True False
5. If financial statements fail to disclose a material fact, the auditors may disclose the information in an explanatory paragraph and issue an unqualified opinion on the statements.
True False
6. If financial statements contain a material departure from generally accepted accounting principles, the auditors usually should not issue an unqualified opinion.
True False
7. A "very material" change from one generally accepted accounting principle to another generally accepted accounting principle usually results in an adverse opinion by the auditors.
True False
8. When there is a significant question about a company's ability to remain a going concern, the report issued is usually unqualified with an explanatory paragraph.
True False
9. A client imposed scope limitation will generally result in a disclaimer of opinion.
True False
10. Regulation S-X governs the form and content of financial statements filed with the SEC.
True False
Multiple Choice Questions
11. Which of the following is not explicitly included in an audit report for a nonpublic company?
A. A statement that he auditor believes that his or her audit provides a reasonable basis for expressing negative assurance.
B. A statement that the auditor's responsibility is to express an opinion on...