Auditors would not normailly issue a qualified opinion on the entity\'s financia
ID: 2598307 • Letter: A
Question
Auditors would not normailly issue a qualified opinion on the entity's financial statements when O an accounting principle at variance with generally accepted accounting principles is used. the auditors lack independence with respect to the audited entity. O a scope limitation prevents the auditors from completing an important auditing procedure. O the entity has undertaken a change in accounting principle with which the auditor does not agree. QUESTION 8 2.5 points Save Answer An auditor is considering whether the omission of the confirmation of investments impairs the auditor's ability to support a previously expressed unmodified opinion. The auditor feed not perform this omitted procedure if 0 the results of alternative procedures that were performed compensate for the omission. 0 the auditor's assessed level of detection risk is low. O the omission is documented in a communication with the audit committee. O no individual investment is material to the financial statements taken as a whole. QUESTION9 2.5 points Save Answer Which of the following questions would auditors most likely include on an internal control questionnaire for notes payable? 0 Are assets that collaterasze notes payable critically needed for the entity's continued .xistence? OAre two or more authorized signatures required on checks that repay notes payable? Are the proceeds from notes payable used for the purchase of noncurrent assets? O Are direct borrowings on notes payable authorized by the board of directors? QUESTION 10 26 points Save Answer Which of the following events occurring after the audit report release date most likey would cause auditors to make further inquiries about the previously-issued financial statements? An uninsured natural disaster occurs that may affect the entity's ability to continue as a going concern. A contingency is resolved that had been disclosed in the audited financial statements. New information is discovered concerning undisclosed lease transactions during the period under audit. A subsidiary is sold that accounts for 2S% of the entity's consolidated net income. QUESTION 11 2.5 points Save Answer
Explanation / Answer
Q7.
Auditor would not normally issue a qualified opinion on the entity’s financial statements when
Answer is B. Auditor lacks independence with respect to the audited entity
Qualified opinion is issued when auditor cannot reduce the risk of potential material misstatements by performing their audit procedure while auditing the entity.
Q8.
An auditor is considering whether the omission of the confirmation of investments impairs the auditor’s ability to support a previously expressed unmodified opinion, the auditor need not perform this omitted procedure if:
Answer is A: The result of alternative procedures that were performed compensate for the omission.
Auditor can rely if result of alternative procedure are enough to substantiate the omission of confirmation of investment and to support a previously expressed unmodified opinion .
Q9.
Which of the following questions would auditors most likely to include on an internal control questionnaire for notes payable:
Answer is D. Are direct borrowings or notes payable authorized by the board of directors?
Internal control are improved when segregation of duties exits and taken care of. So it is important to include question relating to authorization (different person should be performing and authorizing) in internal control questionnaire.
Q10.
Which of the followings events occurring after the audit report date most likely would cause auditors to make further inquiries about the previously issues financial statements
Answer is C: New information is discovered concerning undisclosed lease transaction during the period under audit.
Auditor requires to make further investigations for new information discovered concerning undisclosed lease transaction whether it exits at the balance sheet and is considered to be consistent and reliable.
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