CPA Auditing and Attestation

CPA Auditing and Attestation practice questions, page 32 of 41, with answer review and explanations.

Question 156

How are management's responsibility and the auditor's responsibility represented in the standard auditor's report?

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

Question 157

When there is a significant change in accounting principle, an auditor's report should refer to the lack of consistency in:

  1. The scope paragraph.
  2. An explanatory paragraph between the second paragraph and the opinion paragraph.
  3. The opinion paragraph.
  4. An explanatory paragraph following the opinion paragraph.

Question 158

When a principal auditor decides to make reference to another auditor's examination, the principal auditor's report should always indicate clearly, in the introductory, scope, and opinion paragraphs, the:

  1. Magnitude of the portion of the financial statements examined by the other auditor.
  2. Disclaimer of responsibility concerning the portion of the financial statements examined by the other auditor.
  3. Name of the other auditor.
  4. Division of responsibility.

Question 159

Information accompanying the basic financial statements in an auditor-submitted document should not include:

  1. An analysis of inventory by location.
  2. A statement that the allowance for doubtful accounts is adequate.
  3. A statement that the depreciable life of a new asset is 20 years.
  4. An analysis of revenue by product line.

Question 160

For a particular entity's financial statements to be presented fairly in conformity with generally accepted accounting principles, it is not required that the principles selected:

  1. Be appropriate in the circumstances for the particular entity.
  2. Reflect transactions in a manner that presents the financial statements within a range of acceptable limits.
  3. Present information in the financial statements that is classified and summarized in a reasonable manner.
  4. Be applied on a basis consistent with those followed in the prior year.