Auditing and Assurance Services, 15e (Arens)
Chapter 3 Audit Reports
Learning Objective 3-1
1) An audit of historical financial statements most commonly includes the:
A) balance sheet, statement of retained earnings,
...
Auditing and Assurance Services, 15e (Arens)
Chapter 3 Audit Reports
Learning Objective 3-1
1) An audit of historical financial statements most commonly includes the:
A) balance sheet, statement of retained earnings, and the statement of cash flows.
B) income statement, the statement of cash flows, and the statement of net working capital.
C) statement of cash flows, balance sheet, and the statement of retained earnings.
D) balance sheet, income statement, statement of cash flows, and the statement of changes in
stockholders' equity.
Answer: D
Terms: Audit of historical financial statements
Diff: Moderate
Objective: LO 3-1
AACSB: Reflective thinking skills
2) Auditing standards require that the audit report must be titled and that the title must:
A) include the word "independent."
B) indicate if the auditor is a CPA.
C) indicate if the auditor is a proprietorship, partnership, or corporation.
D) indicate the type of audit opinion issued.
Answer: A
Terms: Auditing standards require audit report title
Diff: Easy
Objective: LO 3-1
AACSB: Reflective thinking skills
13) To emphasize the fact that the auditor is independent, a typical addressee of the audit report
could be:
A)
Company Controller Shareholders Board of Directors
No Yes Yes
B)
Company Controller Shareholders Board of Directors
No No Yes
C)
Company Controller Shareholders Board of Directors
Yes Yes No
D)
Company Controller Shareholders Board of Directors
Yes No No
Answer: A
Terms: Audit report addressee
Diff: Easy
Objective: LO 3-1
AACSB: Reflective thinking skills
4) The auditor's responsibility section of the standard unqualified audit report states that the audit
is designed to:
A) discover all errors and/or irregularities.
B) discover material errors and/or irregularities.
C) conform to generally accepted accounting principles.
D) obtain reasonable assurance whether the statements are free of material misstatement.
Answer: D
Terms: Scope paragraph of standard unqualified audit report states
Diff: Easy
Objective: LO 3-1
AACSB: Reflective thinking skills
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