AUD

AUD practice questions, page 22 of 41, with answer review and explanations.

Question 106

An auditor may report on condensed financial statements that are derived from complete financial statements if the:

  1. Condensed financial statements are distributed to stockholders along with the complete financial statements.
  2. Auditor describes the additional procedures performed on the condensed financial statements.
  3. Auditor indicates whether the information in the condensed financial statements is fairly stated in all material respects in relation to the complete financial statements from which it has been derived.
  4. Condensed financial statements are presented in comparative form with the prior year's condensed financial statements.

Question 107

An auditor is engaged to report on selected financial data that are included in a client-prepared document containing audited financial statements. Under these circumstances, the report on the selected data should:

  1. Be limited to data derived from the audited financial statements.
  2. Be distributed only to senior management and the board of directors.
  3. State that the presentation is a comprehensive basis of accounting other than GAAP.
  4. Indicate that the data are not fairly stated in all material respects.

Question 108

If information accompanying the basic financial statements in an auditor-submitted document has been subjected to auditing procedures, the auditor may include in the auditor's report on the financial statements an opinion that the accompanying information is fairly stated in:

  1. Accordance with generally accepted auditing standards.
  2. Conformity with generally accepted accounting principles.
  3. All material respects in relation to the basic financial statements taken as a whole.
  4. Accordance with attestation standards expressing a conclusion about management's assertions.

Question 109

An auditor concludes that there is a material inconsistency in the other information in an annual report to shareholders containing audited financial statements. The auditor believes that the financial statements do not require revision, but the client is unwilling to revise or eliminate the material inconsistency in the other information. Under these circumstances, what action would the auditor most likely take?

  1. Consider the situation closed because the other information is not in the audited financial statements.
  2. Issue an "except for" qualified opinion after discussing the matter with the client's audit committee.
  3. Disclaim an opinion on the financial statements after explaining the material inconsistency in a separate explanatory paragraph.
  4. Revise the auditor's report to include a separate explanatory paragraph describing the material inconsistency.

Question 110

In the standard report on condensed financial statements that are derived from a public entity's audited financial statements, a CPA should indicate that the:

  1. Condensed financial statements are prepared in conformity with another comprehensive basis of accounting.
  2. CPA has audited and expressed an opinion on the complete financial statements.
  3. Condensed financial statements are not fairly presented in all material respects.
  4. CPA expresses limited assurance that the financial statements conform with GAAP.