CPA Test

CPA Test practice questions, page 9 of 13, with answer review and explanations.

Question 41

Which paragraphs of an auditor's standard report on financial statements should refer to generally accepted auditing standards (GAAS) and generally accepted accounting principles (GAAP)?

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

Question 42

In which of the following circumstances would an auditor be most likely to express an adverse opinion?

  1. The chief executive officer refuses the auditor access to minutes of board of directors' meetings.
  2. Tests of controls show that the entity's internal control is so poor that it cannot be relied upon.
  3. The financial statements are not in conformity with the FASB Statements regarding the capitalization of leases.
  4. Information comes to the auditor's attention that raises substantial doubt about the entity's ability to continue as a going concern.

Question 43

When disclaiming an opinion due to a client-imposed scope limitation, an auditor should indicate in a separate paragraph why the audit did not comply with generally accepted auditing standards. The auditor should also omit the:

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

Question 44

An auditor decides to issue a qualified opinion on an entity's financial statements because a major inadequacy in its computerized accounting records prevents the auditor from applying necessary procedures. The opinion paragraph of the auditor's report should state that the qualification pertains to:

  1. A client-imposed scope limitation.
  2. A departure from generally accepted auditing standards.
  3. The possible effects on the financial statements.
  4. Inadequate disclosure of necessary information.

Question 45

When an auditor qualifies an opinion because of inadequate disclosure, the auditor should describe the nature of the omission in a separate explanatory paragraph and modify the:

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