7 . If a company issues financial statements that omits a material required disc

Question

7. If a company issues financial statements that omits a material required disclosure, the auditor ordinarily will express a (an):

MULTIPLE CHOICE

a. Unmodified opinion

b. Quliified opinion

c. review report

d. unmodified opinion with a separate explanatory report.

11. The auditors identified a material weakness in internal control in August. The client was informed and the client corrected the material weakness prior to year end (December 31); the auditors concluded that management eliminated the material weakness prior to year end. The appropriate audit report on internal control is:

MULTIPLE CHOICE

a. Qualified

b. Unmodified

c. Unmodified with explanatory language relating to the material weakness.

d. Adverse

13. Which of the following is not a requirement of Section 404 of the Sarbanes Oxley act:

MULTIPLE CHOICE

a. Management needs to provide a report on internal control.

b. The CPA firm needs to audit internal control and then report on the assessment made by management.

c. The CPA firm needs to audit internal control and express an opinion on it.

d. The CPA firm needs to audit and express an opinion on compliance with applicable laws and regulations.

15. When there are limitations on the scope of the audit that precludes the issuance of a standard report, the auditor will issue either a qualified opinion or a disclaimer of opinion.

MULTIPLE CHOICE

a. true

b. false

a. Qualified

b. Unmodified

c. Unmodified with explanatory language relating to the material weakness.

d. Adverse

Explanation / Answer

If a company issues financial statements that omits a material required disclosure, the auditor ordinarily will express a Qualified Opinion.

Qualified opinion is a one of the type of modified opinion. In this opinion, there is material misstatement found while conducting the audit of financial statements but those misstatement are not pervasive. And pervasive is based on the auditors judgement. Material Misstatement is pervasive to financial statement means that misstatement is important on the basis of auditor's judgement but its does not affect the financial statements and users decision making.

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