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?
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