ACCT 428 / ACCT428 / ACCT/428 Week 8 Final exam (NEW 2016)

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HOMEWORK Description

ACCT 428 / ACCT428 / ACCT/428 Week 8 Final exam (NEW 2016)

1. (TCO 2) If a misstatement is immaterial to the financial statements of the entity for the current period, but is expected to have a material effect in future periods, it is appropriate to issue a(n)

2. (TCO 2) When the auditor believes a company’s financial statements are misleading because they were not prepared in conformity with GAAP, the auditor must issue a(n)

3. (TCO 2) When qualifying an opinion because of an insufficiency of audit evidence, an auditor should refer to the situation in the:

4. (TCO 2) Jewel, CPA, audited Infinite Co.’s prior-year financial statements. These statements are presented with those of the current year for comparative purposes without Jewel’s auditor’s report, which expressed a qualified opinion. In drafting the current year’s auditor’s report, Crain, CPA, the successor auditor, should:

1.    Not name Jewel as the predecessor auditor.

2.    Indicate the type of report issued by Jewel.

Indicate the substantive reasons for Jewel’s qualification

5. (TCO 11) Which of the following is not a purpose of the client letter of representation?

6. (TCO 2) Which of the following conditions or events most likely would cause an auditor to have substantial doubt about an entity’s ability to continue as a going concern?

7. (TCO 2) In May, Year 4, an auditor reissues the auditor’s report on the Year 2 financial statements at a continuing client’s request. The Year 2 financial statements are not restated and the auditor does not revise the wording of the report. The auditor should:

8. (TCO 11) Which of the following items would ordinarily not be included in the standard letter of inquiry to the client’s attorney?

9. (TCO 2) In which type of report would you read the following statement: “We believe that our examination provides a reasonable basis for our opinion.”?

10. (TCO 2) In connection with a proposal to obtain a new client, an accountant in public practice is asked to prepare a written report on the application of the requirements of an applicable financial reporting framework to a specific transaction. The accountant’s report should include a statement that