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1. (TCO 2) If a misstatement is immaterial to
the financial statements of the entity for the current period, but is expected
to have a material effect in future periods, it is appropriate to issue a(n)
2. (TCO 2) When the auditor believes a company's financial
statements are misleading because they were not prepared in conformity with
GAAP, the auditor must issue a(n)
3. (TCO 2) When qualifying an opinion because of an
insufficiency of audit evidence, an auditor should refer to the situation in
the:
4. (TCO 2) Jewel, CPA, audited Infinite Co.'s prior-year
financial statements. These statements are presented with those of the current
year for comparative purposes without Jewel's auditor's report, which expressed
a qualified opinion. In drafting the current year's auditor's report, Crain,
CPA, the successor auditor, should:
- Not name Jewel as the
predecessor auditor.
- Indicate the type of
report issued by Jewel.
Indicate the substantive reasons for Jewel's qualification
5. (TCO 11) Which of the following is not a purpose of the
client letter of representation?
6. (TCO 2) Which of the following conditions or events most
likely would cause an auditor to have substantial doubt about an entity's
ability to continue as a going concern?
7. (TCO 2) In May, Year 4, an auditor reissues the auditor's
report on the Year 2 financial statements at a continuing client's request. The
Year 2 financial statements are not restated and the auditor does not revise
the wording of the report. The auditor should:
8. (TCO 11) Which of the following items would ordinarily not be
included in the standard letter of inquiry to the client's attorney?
9. (TCO 2) In which type of report would you read the following
statement: "We believe that our examination provides a reasonable basis
for our opinion."?
10. (TCO 2) In connection with a proposal to obtain a new
client, an accountant in public practice is asked to prepare a written report
on the application of the requirements of an applicable financial reporting
framework to a specific transaction. The accountant's report should include a
statement that
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