Question 1

A scope limitation imposed by a client would result in an adverse opinion.

Accepted Answer

False

Question 2

Which level of assurance is provided by a public accountant as a result of an audit?

Accepted Answer

D

Question 3

Levels of assurance refer to

Accepted Answer

Levels of assurance relate to the extent and nature of the work performed by auditors and the type of conclusions they can provide regarding financial statements, indicating the degree of confidence users can have in the financial information.

Question 4

When an adverse opinion is given all the substantive reasons for the opinion must be disclosed in the report in explanatory paragraphs.

Accepted Answer

According to the auditing standards, when an adverse opinion is given, all the substantive reasons for the opinion must be disclosed in the report in explanatory paragraphs. This is necessary to provide transparency and clarity regarding the auditor's findings and conclusion.

Question 5

Auditors cannot give negative assurance in an audit report.

Accepted Answer

The answer of Auditors cannot give negative assurance in an...

Question 6

Without the public accountant's knowledge or consent, the enterprise indicates that the PA
Was involved with information issued by them.

Accepted Answer

The enterprise is indicating that the PA is associated with the information without the PA's knowledge or consent. This means that the PA is not responsible for the information and should not issue an opinion on it.

Question 7

In which of the following circumstances is a public accountant considered associated with a company's financial information.

Accepted Answer

The answer of In which of the following circumstances is...

Question 8

Securities commissions such as the Ontario Security Commission allow public companies to file of financial statements that are not in accordance with GAAP as long as the auditor explains the departure in the audit report.

Accepted Answer

Public companies are generally required to file financial statements in accordance with GAAP, and any departure must be justified and approved by the securities commission, not just explained by the auditor.

Question 9

By its silence, a clean opinion implies that the financial statement disclosures are reasonably adequate.

Accepted Answer

When an auditor issues a "clean opinion" on financial statements, it means that they have reviewed the statements and found no material misstatements or omissions. This implies that the financial statement disclosures are reasonably adequate, which is why the answer is A.

Question 10

The words "except for" should be used in the scope paragraph only if there is a reservation resulting in a disclaimer of opinion or a scope qualification.

Accepted Answer

The words "except for" should only be used in the scope paragraph if there is a limitation on the auditor's scope of work that results in a disclaimer of opinion or a scope qualification. If there are no such limitations, then the words "except for" should not be used in the scope paragraph.

Question 11

The standard audit report must always refer to consistency of accounting principles.

Accepted Answer

The standard audit report does not always refer to the consistency of accounting principles unless there is a change that affects comparability.

Question 12

When significant uncertainties exist the auditor must modify the opinion paragraph of the standard audit report.

Accepted Answer

The answer of When significant uncertainties exist the auditor must...

Question 13

Auditing standards require that an appropriate communication be issued in all cases where an accountant's name is associated with financial information.

Accepted Answer

This is true according to Generally Accepted Auditing Standards (GAAS). The communication can take various forms such as an audit report, a review report, or a compilation report, but it must be issued whenever the accountant's name is associated with the financial information.

Question 14

When there is material uncertainty about an auditee's ability to continue as a going concern is doubtful, and the issue has been fully disclosed in the notes to the financial statements, the auditor should issue a qualified report with a paragraph drawing attention to the going concern issue.

Accepted Answer

When there is material uncertainty about an auditee's ability to continue as a going concern, the auditor should issue a qualified report with a paragraph drawing attention to the going concern issue.

Question 15

An accountant becomes associated with financial statements when they sign them as the
Chief Financial Officer

Accepted Answer

The answer of An accountant becomes associated with financial statements...

Question 16

Under which of the following circumstances does an accountant become associated with a financial report?

Accepted Answer

An accountant becomes associated with a financial report when the enterprise indicates that the accountant audited or reviewed the information included in the report, implying the accountant's involvement and responsibility for the accuracy of the report.

Question 17

Which level of assurance requires PA to gather the most evidence?

Accepted Answer

The answer of Which level of assurance requires PA to...

Question 18

Many users interpret audit reports based on the number of paragraphs.In a standard audit report on financial statements, how many paragraphs are there?

Accepted Answer

The answer of Many users interpret audit reports based on...

Question 19

When the auditor is not independent, a GAAP departure qualification is required.

Accepted Answer

The answer of When the auditor is not independent, a...

Question 20

All modifications to the standard unqualified audit report are called qualifications.

Accepted Answer

Not all modifications to an audit report are qualifications. Some modifications may include emphasis of matter or other matter paragraphs, which do not qualify the opinion.

Quiz 3: Reports on Audited Financial Statements and Audited Internal Controlt