AUD

AUD practice questions, page 16 of 41, with answer review and explanations.

Question 76

Under which of the following circumstances would an auditor's expression of an unqualified opinion be inappropriate?

  1. The auditor is unable to obtain the audited financial statements of a significant subsidiary.
  2. The financial statements are prepared on the entity's income tax basis.
  3. There are significant deficiencies in the design and operation of the entity's internal control.
  4. Analytical procedures indicate that many year-end account balances are not comparable with the prior year's balances.

Question 77

Jewel, CPA, audited Infinite Co.'s prior-year financial statements. These statements are presented with those of the current year for comparative purposes without Jewel's auditor's report, which expressed a qualified opinion. In drafting the current year's auditor's report, Crain, CPA, the successor auditor, should: I. Not name Jewel as the predecessor auditor. II. Indicate the type of report issued by Jewel. III. Indicate the substantive reasons for Jewel's qualification.

  1. I only.
  2. I and II only.
  3. II and III only.
  4. I, II, and III.

Question 78

A registration statement filed with the SEC contains the reports of two independent auditors on their audits of financial statements for different periods. The predecessor auditor who audited the prior-period financial statements generally should obtain a letter of representation from the:

  1. Successor independent auditor.
  2. Client's audit committee.
  3. Principal underwriter.
  4. Securities and Exchange Commission.

Question 79

Before reissuing the prior year's auditor's report on the financial statements of a former client, the predecessor auditor should obtain letters of representation from the:

  1. Former client's management and the board of directors.
  2. Former client's attorney and management.
  3. Former client's board of directors and the successor auditor.
  4. Successor auditor and the former client's management.

Question 80

In May X4, an auditor reissues the auditor's report on the X2 financial statements at a continuing client's request. The X2 financial statements are not restated and the auditor does not revise the wording of the report. The auditor should:

  1. Dual date the reissued report.
  2. Use the release date of the reissued report.
  3. Use the original report date on the reissued report.
  4. Use the current-period auditor's report date on the reissued report.