Which of the following is not an element of quality control?
a. Documentation
b. Inspection.
c. Supervision
d. Consultation.
Answer: A
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Certified Public Accountant
- If the auditor believes that required disclosures are omitted from the financial statements, the auditor should decide between issuing a(n)
- Keller, CPA, was about to issue an unqualified opinion on the financial statements of Lupton Television Broadcasting company when a letter was received from Lupton's independent counsel. The letter stated that the Federal Communications Commission has notified Lupton that its broadcasting license will not be renewed because of alleged irregularities in its broadcasting practices. Lupton cannot continue to operate without the license. Keller has also learned that Lupton and its independent counsel plan to take all necessary legal action to retain the license. The letter from independent counsel, however, states that a favorable outcome of any legal action is highly uncertain. On the basis of this information, what action should Keller take?
- An auditor concludes that there is substantial doubt about an entity's ability to continue as a going concern. If the entity's disclosures about continued existence are adequate, the audit report may include A Disclaimer of Opinion A qualifed Opinion ----------------------- ------------------
- When management prepares financial statements on the basis of a going concern and the auditor believes the company may not continue as a going concern, the auditor should issue a(n)
- An auditor's report that refers to a departure form generally accepted accounting principles includes the language. "In our opinion, with the foregoing explanation, the financial statements referred to above present fairly...." This is a(n)
- An explanatory paragraph following an opinion paragraph describes an uncertainty as follows: As discussed in Note X to the financial statements, the company is a defendant in a lawsuit alleging infringement of certain patent rights and claiming damages. Discovery proceedings are in progress. The ultimate outcome of the litigation cannot presently be determined. Accordingly, no provision for any liability that may result upon adjudication has been made in the accompanying financial statements. What type of opinion should the auditor express in this circumstance?
- An auditor may issue a qualified opinion for Inadequate Scope Disclosure Limitation
- A principal auditor is satisfied both with the independence and professional reputation of another auditor who audited a subsidiary, but wants to share responsibility with the other auditor in the audit report. The principal auditor should
- An auditor is unable to determine the amounts associated with illegal acts committed by a client. The auditor would most likely issue
- Does an auditor make the following representations explicitly or implicitly in a standard audit report on comparative financial statements?
- Under Statement on Auditing Standards No. 59, "The Auditor's consideration of an Entity's Ability to continue as a Going Concern," an independent auditor is responsible for
- Which of the following statements indicates a qualified opinion?
- An auditor completed field work on February 10, 2002 for a December 31, 2001 year-end client. A significant subsequent event occurred on February 22, 2002. In this case, which of the following report dates would not be appropriate?
- An audit report should be dated as of the
- In which of the following circumstances would an adverse opinion be appropriate?
- An auditor includes an explanatory paragraph in an otherwise unqualified report in order to emphasize that the entity being reported on is a subsidiary of another business enterprise. The inclusion of this paragraph
- Under which of the following sets of circumstances might an auditor disclaim an opinion?
- Raider, Inc. uses the last-in, first-out method to value half of its inventory and the first-in, first-out method to value the other half. Assuming the auditor is satisfied in all other respects, under these circumstances the auditor will issue a(n)
- An auditor's standard report expressed an unqualified opinion and includes an explanatory paragraph that emphasizes a matter included in the notes to the financial statements. The auditor's report would be deficient if the explanatory paragraph states that the entity
- When comparative financial statements are presented, the fourth reporting standard, which refers to financial statements "taken as a whole", should be considered to apply to the financial statements of the
- If an accounting change has no material effect on the financial statements in the current year but the change is reasonably certain to have a material effect in later years, the change should be
- If the auditor believes there is minimal likelihood that resolution of an uncertainty will have a material effect on the financial statements, the auditor would issue a(n)
- An auditor's report includes a statement that "the financial statements do not present fairly the financial position in conformity with generally accepted accounting principles." This auditor's report was probably issued in connection with financial statements that were
- An auditor's opinion read as follows: "In our opinion, except for the above-mentioned limitation on the scope of our audit.." This is an example of a(n)
- The fourth reporting standard requires that the auditor's report contain either an expression of opinion regarding the financial statements taken as a whole or an assertion that an opinion cannot be expressed. The objective of the fourth standard is to prevent