CPA Auditing and Attestation

CPA Auditing and Attestation practice questions, page 13 of 41, with answer review and explanations.

Question 61

An auditor was unable to obtain sufficient appropriate audit evidence concerning certain transactions due to an inadequacy in the entity's accounting records. The auditor would choose between issuing a(an):

  1. Qualified opinion and an unqualified opinion with an explanatory paragraph.
  2. Unqualified opinion with an explanatory paragraph and an adverse opinion.
  3. Adverse opinion and a disclaimer of opinion.
  4. Disclaimer of opinion and a qualified opinion.

Question 62

In which of the following situations would a principal auditor least likely make reference to another auditor who audited a subsidiary of the entity?

  1. The other auditor was retained by the principal auditor and the work was performed under the principal auditor's guidance and control.
  2. The principal auditor finds it impracticable to review the other auditor's work or otherwise be satisfied as to the other auditor's work.
  3. The financial statements audited by the other auditor are material to the consolidated financial statements covered by the principal auditor's opinion.
  4. The principal auditor is unable to be satisfied as to the independence and professional reputation of the other auditor.

Question 63

In which of the following situations would an auditor ordinarily issue an unqualified audit opinion without an explanatory paragraph?

  1. The auditor wishes to emphasize that the entity had significant related party transactions.
  2. The auditor decides to make reference to the report of another auditor as a basis, in part, for the auditor's opinion.
  3. The entity issues financial statements that present financial position and results of operations, but omits the statement of cash flows.
  4. The auditor has substantial doubt about the entity's ability to continue as a going concern, but the circumstances are fully disclosed in the financial statements.

Question 64

When there has been a change in accounting principle that materially affects the comparability of the comparative financial statements presented and the auditor concurs with the change, the auditor should:

  1. Option A
  2. Option B
  3. Option C
  4. Option D

Question 65

When a qualified opinion results from a limitation on the scope of the audit, the situation should be described in an explanatory paragraph:

  1. Preceding the opinion paragraph and referred to only in the scope paragraph of the auditor's report.
  2. Following the opinion paragraph and referred to in both the scope and opinion paragraphs of the auditor's report.
  3. Following the opinion paragraph and referred to only in the scope paragraph of the auditor's report.
  4. Preceding the opinion paragraph and referred to in both the scope and opinion paragraphs of the auditor's report. D