Test Bank For Auditing A Risk Based-Approach - 10th - 2024 All Chapters - 9780357721872.pdf

AuditingjandjAssurancejServices,j16e,jGlobaljEditionj(Arens/Elder/Beasley)jChapt
erj3j AuditjReports

3.1j j LearningjObjectivej3-1

1) Whichjofjthejfollowingjisjajcorrectjstatementjregardingjthejstandardjunmodifiedjopinionjauditjrepo
rt?
A) Thejformatjofjthejauditjreportjforjpublicjandjnonpublicjentitiesjarejidentical.
B) Thejauditor'sjresponsibilityjparagraphjincludesjajstatementjthatjthejauditorsjarejresponsiblejforj
selectingjthejappropriatejaccountingjprinciples.
C) Thejauditjreportjincludesjthejnamejofjthejleadjpartnerjonjthejaudit.
D) Thejscopejparagraphjincludesjajstatementjthatjthejauditorjconsidersjinternaljcontrolsjwhenjdesi
gningjthejauditjproceduresjperformed.
Answer:j D
Terms:j Auditjreportsjissuedjforjfinancialjstatementsjofjprivatejcompany;jScopejparagraph;jGenerallyj
acceptedjauditingjstandards
Diff:j ModeratejObjective
:j LOj3-1
AACSB:j Reflectivejthinking

2) Auditingjstandardsjrequirejthatjthejauditjreportjmustjbejtitledjandjthatjthejtitlejmust
A) includejthejwordj"independent."
B) indicatejifjthejauditorjisjajCPA.
C) indicatejifjthejauditorjisjajproprietorship,jpartnership,jorjcorporation.
D) indicatejthejtypejofjauditjopinionjissued.jA
nswer:j A
Terms:j AuditingjstandardsjrequirejauditjreportjtitlejDif
f:j Easy
Objective:j LOj3-1
AACSB:j Reflectivejthinking




1
Copyrightj©j2017jPearsonjEducation,jLtd.

,3) Tojemphasizejthejfactjthatjthejauditorjisjindependent,jajtypicaljaddresseejofjthejauditjreportjcoul
djbe
A)
CompanyjController Shareholders BoardjofjDirectors
No Yes Yes

B)
CompanyjController Shareholders BoardjofjDirectors
No No Yes

C)
CompanyjController Shareholders BoardjofjDirectors
Yes Yes No

D)
CompanyjController Shareholders BoardjofjDirectors
Yes No No

Answer:j A
Terms:j AuditjreportjaddresseejD
iff:j Easy
Objective:j LOj3-1
AACSB:j Reflectivejthinking

4) Thejauditor'sjresponsibilityjsectionjofjthejstandardjunmodifiedjopinionjauditjreportjstatesjthatjthej
auditjisjdesignedjto
A) discoverjalljerrorsjand/orjirregularities.
B) discoverjmaterialjerrorsjand/orjirregularities.
C) conformjtojgenerallyjacceptedjaccountingjprinciples.
D) obtainjreasonablejassurancejwhetherjthejstatementsjarejfreejofjmaterialjmisstatement.jAn
swer:j D
Terms:j ScopejparagraphjofjstandardjunqualifiedjauditjreportjstatesjDif
f:j Easy
Objective:j LOj3-1
AACSB:j Reflectivejthinking




2
Copyrightj©j2017jPearsonjEducation,jLtd.

,5) Thejauditjreportjdatejonjajstandardjunmodifiedjopinionjauditjreportjindicates
A) thejlastjdayjofjthejfiscaljperiod.
B) thejdatejonjwhichjthejfinancialjstatementsjwerejfiledjwithjthejSecuritiesjandjExchangejCo
mmission.
C) thejlastjdatejonjwhichjusersjmayjinstitutejajlawsuitjagainstjeitherjthejclientjorjthejauditor.
D) thejlastjdayjofjthejauditor'sjresponsibilityjforjthejreviewjofjsignificantjeventsjthatjoccurredjafter
jthejdatejofjthejfinancialjstatements.

Answer:j D
Terms:j AuditjreportjdatejonjstandardjunqualifiedjreportjDiff:j
Easy
Objective:j LOj3-1
AACSB:j Reflectivejthinking

6) ThejstandardjauditjreportjforjnonpublicjentitiesjrefersjtojGAASjandjGAAPjinjwhichjsections?jA)
GAAS GAAP
Auditor'sjresponsibility Auditor'sjresponsibility

B)
GAAS GAAP
Auditor'sjresponsibility Introductoryjparagraph

C)
GAAS GAAP
Management'sjresponsibility Management'sjresponsibility
andjOpinionjparagraph andjIntroductoryjparagraph

D)
GAAS GAAP
Management'sjresponsibility
Auditor'sjresponsibility andjOpinionjparagraph

Answer:j D
Terms:j Standardjunqualifiedjauditjreportjforjnonpublicjentities;jGAASjandjGAAPjDiff
:j Challenging
Objective:j LOj3-1
AACSB:j Reflectivejthinking




3
Copyrightj©j2017jPearsonjEducation,jLtd.

, 7) Whichjofjthejfollowingjisjnotjexplicitlyjstatedjinjthejstandardjunmodifiedjopinionjauditjrepo
rt?
A) Thejfinancialjstatementsjarejthejresponsibilityjofjmanagement.
B) Thejauditjwasjconductedjinjaccordancejwithjgenerallyjacceptedjaccountingjprinciples.
C) Thejauditorsjbelievejthatjthejauditjevidencejprovidesjajreasonablejbasisjforjtheirjopinion.
D) Anjauditjincludesjassessingjthejaccountingjestimatesjused.jA
nswer:j B
Terms:j StandardjunmodifiedjopinionjauditjreportjDiff:
j Easy

Objective:j LOj3-1
AACSB:j Reflectivejthinking

8) Thejstandardjunmodifiedjopinionjauditjreportjforjajnonpublicjentityjmust
A) havejajreportjtitlejthatjincludesjthejwordj"CPA."
B) bejaddressedjtojthejcompany'sjstockholdersjandjcreditors.
C) bejdated.
D) includejanjexplanatoryjparagraph.j
Answer:j C
Terms:j Standardjunqualifiedjauditjreportjforjajnonpublicjentity;jeightjpartsjofjthejreportjDiff:j E
asy
Objective:j LOj3-1
AACSB:j ReflectivejthinkingjTo
pic:j Public

9) Thejmanagement'sjresponsibilityjsectionjofjthejstandardjunmodifiedjopinionjauditjreportjforjajnon
publicjcompanyjstatesjthatjthejfinancialjstatementsjare
A) thejresponsibilityjofjthejauditor.
B) thejresponsibilityjofjmanagement.
C) thejjointjresponsibilityjofjmanagementjandjthejauditor.
D) nonejofjthejabove.j
Answer:j B
Terms:j Standardjunqualifiedjauditjreportjforjajnonpublicjentity;jeightjpartsjofjthejreportjDiff:j E
asy
Objective:j LOj3-1
AACSB:j Reflectivejthinking




4
Copyrightj©j2017jPearsonjEducation,jLtd.