CPA Auditing and Attestation

CPA Auditing and Attestation practice questions, page 27 of 41, with answer review and explanations.

Question 131

An auditor's report contains the following sentences: We did not audit the financial statements of JK Co., a wholly owned subsidiary, which statements reflect total assets and revenues constituting 17 percent and 19 percent, respectively, of the related consolidated totals. Those statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for JK Co., is based solely on the report of the other auditors. These sentences:

  1. Are an improper form of reporting.
  2. Divide responsibility.
  3. Disclaim an opinion.
  4. Qualify the opinion.

Question 132

Which of the following phrases should be included in the opinion paragraph when an auditor expresses a qualified opinion?

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

Question 133

Which of the following procedures would an auditor most likely perform to obtain evidence about the occurrence of subsequent events?

  1. Recomputing a sample of large-dollar transactions occurring after year-end for arithmetic accuracy.
  2. Investigating changes in stockholders' equity occurring after year-end.
  3. Inquiring of the entity's legal counsel concerning litigation, claims, and assessments arising after yearend.
  4. Confirming bank accounts established after year-end.

Question 134

What is an auditor's responsibility for supplementary information required by the GASB that is placed outside the basic financial statements?

  1. Label the information as unaudited and expand the auditor's report to include a disclaimer on the information.
  2. Add an explanatory paragraph to the auditor's report and refer to the information as "required supplementary information."
  3. Apply limited procedures to the information and report deficiencies in, or the omission of, the information.
  4. Audit the required supplementary information in accordance with generally accepted governmental auditing standards.

Question 135

An auditor's responsibility to express an opinion on the financial statements is:

  1. Implicitly represented in the auditor's standard report.
  2. Explicitly represented in the opening paragraph of the auditor's standard report.
  3. Explicitly represented in the scope paragraph of the auditor's standard report.
  4. Explicitly represented in the opinion paragraph of the auditor's standard report.