Comprehensive Material Series Audit Reports: The Audit Process-Audit Responsibilities and objectives The Audit Process-Audit Evidence

Explain why auditors’ reports are important to users of financial statements and why it is desirable to have standard wording. List the seven parts of a standard unqualified audit report and explain the meaning of eac ...

Explain why auditors’ reports are important to users of financial statements and why it is desirable to have standard wording. List the seven parts of a standard unqualified audit report and explain the meaning of each part. How do the parts compare with those found in qualified report? What are the purposes of the scope paragraph in the auditor’s report? Identify the most important information included in the scope paragraph. What are the purposes of the opinion paragraph in the auditor’s report? Identify the most important information included in the opinion paragraph On February 17, 2006, a CPA completed the field work on the financial statements for the Buckheizer Technology Corporation for the year ended December 31, 2005. The audit in satisfactory in all respects except for the existence of a change in accounting principle from FIFO to LIFO inventory valuation., which results in an explanatory paragraph to consistency. On February 26, the auditor completed the tax return and the draft of the financial statements. The final audit report was completed, attached to the financial statements, and delivered to the client on March 7. What is the appropriate date on the auditor’s report? On February 17, 2006, a CPA completed the field work on the financial statements for the Buckheizer Technology Corporation for the year ended December 31, 2005. The audit in satisfactory in all respects except for the existence of a change in accounting principle from FIFO to LIFO inventory valuation., which results in an explanatory paragraph to consistency. On February 26, the auditor completed the tax return and the draft of the financial statements. The final audit report was completed, attached to the financial statements, and delivered to the client on March 7. What is the appropriate date on the auditor’s report? Describe the additional information included in the introductory, scope, and opinion paragraphs in a combined audit report on financial statements and the effectiveness of internal control overComprehensive Material Series financial reporting. What is the nature of the additional paragraphs in the audit report? What type of opinion should an auditor issue when the financial statements are not in accordance with GAAP because such adherence would result in misleading statements? Distinguish between an unqualified report with explanatory paragraph or modified wording and a qualified report. Give examples when an explanatory paragraph or modified wording should be used in an unqualified opinion. Describe what is meant by a reports involving the use of other auditors. What are the three options available to the principal auditor and when should each be used? The client has restated the prior-year statements because of a change from LIFO to FIFO. How should be this reflected in the auditor’s report? Distinguish between changes that affect consistency and those that may affect comparability but not consistency. Give an example of each. List the three conditions that require a departure from unqualified opinion and give one specific example of each those conditions. Distinguish between a qualified opinion, adverse opinion, and a disclaimer of opinion, and explain the circumstances under which each is appropriate. Explain how materiality differs for failure to follow GAAP and for lack of independence. How does the auditor’s opinion differ between scope limitations caused by client restrictions and limitations resulting from conditions beyond the client’s control? Under which of these twoComprehensive Material Series would the auditor be most likely to issue a disclaimer of opinion? Explain. Distinguish between a report qualified as to opinion only and one with both a scope and opinion qualification. Identify the three alternative opinion that may be appropriate when the client’s financial statements are not accordance with GAAP. Under what circumstances is each appropriate. Identify the three alternative opinion that may be appropriate when the client’s financial statements are not accordance with GAAP. Under what circumstances is each appropriate. When an auditor discovers more than one condition that requires departure from or modification of standard unqualified report, what should the auditor’s report include? What responsibility does the auditor have for information on the company’s web site that may be inked to electronic versions of the company’s annual financial statements and auditor’s report? How does this differ from the auditor’s responsibility for other information in the company’s annual report that includes the financial statements and auditor’s report?