CPA Auditing and Attestation

CPA Auditing and Attestation practice questions, page 17 of 41, with answer review and explanations.

Question 81

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 82

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.

Question 83

An auditor expressed a qualified opinion on the prior year's financial statements because of a lack of adequate disclosure. These financial statements are properly restated in the current year and presented in comparative form with the current year's financial statements. The auditor's updated report on the prior year's financial statements should:

  1. Be accompanied by the auditor's original report on the prior year's financial statements.
  2. Continue to express a qualified opinion on the prior year's financial statements.
  3. Make no reference to the type of opinion expressed on the prior year's financial statements.
  4. Express an unqualified opinion on the restated financial statements of the prior year.

Question 84

Comparative financial statements include the financial statements of the prior year that were audited by a predecessor auditor whose report is not presented. If the predecessor's report was qualified, the successor should:

  1. Indicate the substantive reasons for the qualification in the predecessor auditor's opinion.
  2. Request the client to reissue the predecessor's report on the prior year's statements.
  3. Issue an updated comparative audit report indicating the division of responsibility.
  4. Express an opinion only on the current year's statements and make no reference to the prior year's statements.

Question 85

An auditor has previously expressed a qualified opinion on the financial statements of a prior period because of a departure from generally accepted accounting principles. The prior-period financial statements are restated in the current period to conform with generally accepted accounting principles. The auditor's updated report on the prior-period financial statements should:

  1. Express an unqualified opinion concerning the restated financial statements.
  2. Be accompanied by the original auditor's report on the prior period.
  3. Bear the same date as the original auditor's report on the prior period.
  4. Qualify the opinion concerning the restated financial statements because of a change in accounting principle. A