CPA Auditing and Attestation

CPA Auditing and Attestation practice questions, page 22 of 41, with answer review and explanations.

Question 106

Which of the following reporting options is least likely with regard to supplementary information that is required by GAAP?

  1. The auditor's report on the financial statements makes no reference to the supplementary information.
  2. A disclaimer of opinion is issued on supplementary information that is not clearly distinguished from the financial statements and is not marked "unaudited."
  3. The auditor's report on the financial statements includes both an opinion on the supplementary information and a statement restricting the use of the report.
  4. The auditor's report on the financial statements includes an opinion regarding whether the supplementary information is fairly stated in all material respects in relation to the financial statements taken as a whole.

Question 107

When an auditor submits a document containing audited financial statements to a client, and those financial statements include supplementary information required by GAAP, the auditor may choose any of the following options, except:

  1. Express an opinion on the information, if he or she has been engaged to examine such information.
  2. Express negative assurance on the information, if review procedures have been appropriately performed.
  3. Report on whether the information is fairly stated in relation to the financial statements taken as a whole, if appropriate auditing procedures have been applied.
  4. Disclaim an opinion on the information.

Question 108

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 109

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 110

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.