AUD EXAM 1

Analytical procedures can best be categorized as

substantive procedures

If management of a nonissuer fails to justify a material change in accounting principle, the auditor should

Add a basis for modified opinion section to the report and express a qualified or an adverse opinion

Once a CPA has determined that accounts receivable have increased because of slow collections in a tight money environment, the CPA is likely to

Expand test of collectibility

Austin, a staff auditor, independently develops an aging schedule for the auditee's accounts receivable. This audit procedure is an example of

Reperformance

An independent auditor is issuing an audot report for a governmental entity and plans to issue separate reports on internal control over financial reporting and compliance with laws and regulations. The auditor should do which of the following

State in the audit report that separate reports will be issued.

AICPA auditing standards require the auditor to include an emphasis of matter paragraph when

The auditor reports on special purpose financial statements The paragraph is intended to draw users attention to a matter appropriately presented or disclosed that is fundamental to users understanding of the financial statements

A client decides not to correct misstatements communicated by the auditor that collectively are not material and wants the auditor to issue the report based on the uncorrected numbers. Which of the following statements is correct regarding the financial statement presentation?

The financial statements are free from material misstatement, and no disclosure is required in the notes to the financial statements Uncorrected misstatement are inuded in the management representation letter NOT disclose in notes

The major reason that the difference and ratio estimation methods are expected to produce audit efficiency is that the

Variability of the populations of differences or ratios is less than that of the population of carrying amounts or audited values