s1: In the absence of significant information to the contrary, an entity is viewed as continuing in operation. S2: If after evaluating management's plans, the auditor concludes that questions about the entity's continued existence are not resolved, he or she should determine whether adequate disclosures are made in the financial statements. a. BOTH STATEMENTS ARE TRUE b. BOTH STATEMENTS ARE FALSE c. ONLY S1 IS TRUE d. ONLY S2 IS TRUE

s1: In the absence of significant information to the contrary, an entity is viewed as continuing in operation. S2: If after evaluating management's plans, the auditor concludes that questions about the entity's continued existence are not resolved, he or she should determine whether adequate disclosures are made in the financial statements. a. BOTH STATEMENTS ARE TRUE b. BOTH STATEMENTS ARE FALSE c. ONLY S1 IS TRUE d. ONLY S2 IS TRUE

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter15: Audit Reports For Financial Statement Audits

Section: Chapter Questions

Problem 4CYBK

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Similar questions

Noncompliance includes transactions entered by the entity’s employees and management in their personal capacity. The preliminary judgment or estimate about materiality represents the maximum amount by which a set of financial statements could be misstated and still not cause the auditor to believe that the decisions of reasonable users would be affected. Group of answer choices False, True True, False True, True False, False
If the auditor concludes that management’s use of the going concern basis of accounting is appropriate in the circumstances but a material uncertainty exists, the auditor shall: i) Determine whether financial statements disclose clearly that there is a material uncertainty ii) Determine whether the financial statements adequately disclose the principal conditions that may cast significant doubt on the entity’s ability to continue as a going concern. iii) Determine whether the financial statements adequately disclose management’s plans to deal with these events or conditions. A. i) and ii) B. i) and iii) C. Only i) D. i) , ii) and iii)
Sufficient and appropriate evidence is the focus of the third field work standard. * O True O False When the auditor concludes that there is substantial doubt about an entity's ability to continue as a going concern, the auditor should consider the possible effects on the financial statements and the related disclosures. O True False
Under what circumstances auditor may express an unqualified opinion? 1. The view presented by the financial information as a whole is consistent with the auditor's knowledge of the business of the entity. 2. The view presented by the financial information as a whole is inconsistent with the auditor's knowledge of the business of the entity. 3. The auditor concludes that the possible effects on the financial statements of undetected misstatements are both material and pervasive. 1, 2, and 3 1 only 2 and 3 only 1 and 4 only Auditing and Cont..pd 10:3 EN
Statement 1: An entity wherein the client has a nominal interest, is considered a related. Statement 2: lf the auditor performed analytical procedures in the audit completion phase and discovers a previously unrecognized risk, the auditor shall issue an adverse opinion. Statement 3: One of the management's responsibilities regarding related party transactions is to properly account for and disclose such transactions. A. Only one statement is correct B. Only two statements are correct C. All statements are correct D. All statements are incorrect
{Auditing} 15. Find the nature of materiality if the client incorrectly selects and applies accounting policy which has negligible effect in the current period but has significant effect on the future period. a. Material by nature b. None of the options c. Materiality by the amount for financial statements as a whole d. Either materiality by amount or materiality by nature
When financial statements contain a departure from GAAP because, due to unusual circumstances, the statements would otherwise be misleading, the auditor should explain the unusual circumstances in a separate paragraph and express an opinion that is....... Select one: a. Adverse. b. Qualified. c. Qualified or adverse, depending on materiality. " d. Unqualified.
Which of the following is correct about audit opinion? a. It does not assure the future viability of the entity b. It does not assure about the audit procedures c. It does assure the future viability of the entity d. It does assure the efficiency of the management
STATEMENT 1: Audit documentation provide the principal support for the auditor's opinion on the fairness of the financial statements. STATEMENT 2: Audit documentation aid in planning and conducting for future audits. A. Only Statement 1 is incorrect B. Only Statement 1 is correct C. Both statements are incorrect D. Both statements are correct
In an auditor's report the absence of any reference to a material uncertainty about the entity’s ability to continue as a going concern can be viewed as a guarantee as to the entity’s ability to continue as a going concern. true false
S1: The representation letter must be addressed to the board of directors or stockholders of the client company. S2: The client's refusal to furnish the auditor with representations may constitute a limitation in the scope of the examination which may preclude the auditor to express an unqualified opinion. a. BOTH STATEMENTS ARE TRUE b. BOTH STATEMENTS ARE FALSE c. ONLY S1 IS TRUE d. ONLY S2 IS TRUE
2. A client has departed from GAAP for what you, the auditor, considers to be justifiable. The financial statements would have been misleading if the client had not departed from GAAP. Circumstance: Type of Opinion: