CPA Auditing and Attestation

CPA Auditing and Attestation practice questions, page 24 of 41, with answer review and explanations.

Question 116

When audited financial statements are presented in a client's document containing other information, the auditor should:

  1. Perform inquiry and analytical procedures to ascertain whether the other information is reasonable.
  2. Add an explanatory paragraph to the auditor's report without changing the opinion on the financial statements.
  3. Perform the appropriate substantive auditing procedures to corroborate the other information.
  4. Read the other information to determine that it is consistent with the audited financial statements.

Question 117

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

  1. Auditor indicates whether the information in the condensed financial statements is fairly stated in all material respects.
  2. Condensed financial statements are presented in comparative form with the prior year's condensed financial statements.
  3. Auditor describes the additional review procedures performed on the condensed financial statements.
  4. Condensed financial statements are distributed only to management and the board of directors.

Question 118

If management (of a governmental body) declines to present supplementary information required by the Governmental Accounting Standards Board (GASB), the auditor should issue a(an):

  1. Adverse opinion.
  2. Qualified opinion with an explanatory paragraph.
  3. Unqualified opinion.
  4. Unqualified opinion with an additional explanatory paragraph.

Question 119

The objective of auditing procedures applied to segment information is to provide the auditor with a reasonable basis for concluding whether:

  1. The information is useful for comparing a segment of one enterprise with a similar segment of another enterprise.
  2. Sufficient audit evidence has been obtained to allow the auditor to be associated with the segment information.
  3. A separate opinion on the segment information is necessary due to inconsistent application of accounting principles.
  4. The information is presented in conformity with the FASB Statement on segment information.

Question 120

Green, CPA, is requested to render an opinion on the application of accounting principles by an entity that is audited by another CPA. Green may:

  1. Not accept such an engagement because to do so would be considered unethical.
  2. Not accept such an engagement because Green would lack the necessary information on which to base an opinion without conducting an audit.
  3. Accept the engagement but should form an independent opinion without consulting with the continuing CPA.
  4. Accept the engagement but should consult with the continuing CPA to ascertain all the available facts relevant to forming a professional judgment.