CPA Auditing and Attestation practice questions, page 14 of 41, with answer review and explanations.
Question 66
Restrictions imposed by a client prohibit the observation of physical inventories, which account for 35% of all assets. Alternative audit procedures cannot be applied, although the auditor was able to examine satisfactory evidence for all other items in the financial statements. The auditor should issue a(an):
"Except for" qualified opinion.
Disclaimer of opinion.
Unqualified opinion with a separate explanatory paragraph.
Unqualified opinion with an Explanation in the scope paragraph. B
Question 67
An auditor concludes that there is substantial doubt about an entity's ability to continue as a going concern for a reasonable period of time. If the entity's disclosures concerning this matter are adequate, the audit report may include a(an):
Option A
Option B
Option C
Option D
Question 68
An auditor should disclose the substantive reasons for expressing an adverse opinion in an explanatory paragraph:
Preceding the scope paragraph.
Preceding the opinion paragraph.
Following the opinion paragraph.
Within the notes to the financial statements. B
Question 69
When management does not provide reasonable justification that a change in accounting principle is preferable and it presents comparative financial statements, the auditor should express a qualified opinion:
Only in the year of the accounting principle change.
Each year that the financial statements initially reflecting the change are presented.
Each year until management changes back to the accounting principle formerly used.
Only if the change is to an accounting principle that is not generally accepted.
Question 70
When an independent CPA is associated with the financial statements of a publicly held entity but has not audited or reviewed such statements, the appropriate form of report to be issued must include a(an):