4. Auditing reporting standards for financial statement and integrated audits re

Question

4. Auditing reporting standards for financial statement and integrated audits require auditors to

       provide which of the following?

      a. Positive assurance.

      b. Negative assurance.

      c. Materiality assurance.

      d. No assurance.

5. Which one of the following is an example of the contents of an opinion paragraph found in an audit

       report?

      a. “We have audited …”

      b. “Nothing came to our attention…”

      c. “The financial statements referred to above present fairly …”

      d. “An audit includes examining, on a test basis …”

6. A client company has a history of negative cash flow trends and continuing losses. Which

      type of opinion will the auditor most likely issue?

    a. Adverse.

      b. Unqualified with explanatory language.

      c. Qualified.

      d. Disclaimer.

Explanation / Answer

4 a. Positive assurance. An audit has to provide information as to what he believes and thus has to provide a positive assurance.

5 c. “The financial statements referred to above present fairly …”. The auditor has to refer to the financial statemnets as he forms an opinion on the basis of the documents and statements provided to him and his opinion is bosed on them.

6. b. Unqualified with explanatory language. Since the company has a negative history, in order to inform the stakeholders the true picture, an auditor should provide an explanation on such situations. However, their is no fraud on mistake in such case and therfore report cannot be qualified.

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