Auditing Chapter 17

What are the two circumstances that result in modified opinions?

1. A departure from GAAP 2. A scope limitation

Identify the sections of the standard audit report for a non public company.

1. Introduction 2. Management's responsibility 3. Auditor's responsibility 4. Opinion

List some differences between the audit report for nonpublic entities and the one for public entities.

1. PCAOB includes the words "registered" in the title 2. PCAOB references standards of the PCAOB rather than GAAS 3. PCAOB includes less detailed discussions of management and auditor responsibilities 4. PCAOB includes an additional paragraph indicating that the auditors have also issued a report on the client's internal control over financial reporting 5. PCAOB does not include section headings

What are the different types of modified audit opinions?

1. Qualified opinion 2. Adverse opinion 3. Disclaimer of opinion

What are the different types of unmodified audit opinions?

1. Unmodified opinion - standard report 2. Unmodified opinion with an emphasis-of-matter paragraph 3. Unmodified opinion with an other-matter paragraph 4. Unmodified opinion on group financial statements

The auditors who wish to draw reader attention to a financial statement note disclosure on significant transactions with related parties should disclose this fact in:

An emphasis of matter paragraph to the auditors report

Assume that the opinion paragraph of an auditors' report begins as follows: "With the explanation given in note 6, the financial statements referred to above present fairly. . . ." This is:

An improper type of reporting

An audit report for a public client indicates that the financial statements were prepared in conformity with:

Generally accepted accounting principles (United States).

When the current auditors make reference to the work of the component auditors, does this result in expression of a qualified opinion?

No, this results in an unmodified opinion on group financial statements. This releases other auditors of responsibility for the audit.

An audit report for a public client indicates that the audit was performed in accordance with:

Standards of the Public Company Accounting Oversight Board (United States).

The auditors' report should be dated as of the date the:

The auditors have accumulated sufficient evidence.

A material departure from generally accepted accounting principles will result in auditor consideration of:

Whether to issue an adverse opinion rather than an 'except for' opinion.