Section (6) - third grade - Auditing

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1. Unqualified Audit Report must be Issued when the following Conditions are
met
A. All statements are included in the FSs.
B. Sufficient evidence has been accumulated, audit is performed in
accordance with auditing standards.
C. The FSs are prepared in accordance with GAAPS.
D. There no circumstances requiring the addition of an explanatory
paragraph or modification of the wording of the report.
E. all of the above
2. which of the following is NOT a required element of a standard unqualified
audit report issued in accordance with AICPA auditing standards ?
A. a title that emphasizes the report is from an independent auditor
B. the signature of the engagement partner
C. the city and state of the audit firm issuing the report
D. a statement explaining management's responsibilities for the financial
statements
3. the date of the CPA's opinion on the financial statements of the client should
be the date of the
A. closing of the client 's books
B. finalization of the terms of the audit engagement
C. completion of all important audit procedures
D. submission of the report to the client
4. if a principle auditor decides to refer in his report to the audit of another
auditor , he is required to disclose the
A. name of the other auditor
B. nature of the inquiry into the other auditor's professional standing and
extent of the review of the other auditor's work
C. portion of the financial statements audited by the other auditor
D. reasons for being unwilling to assume responsibility for the other
auditor's work
5. An entity changed from straight -line method to the declining-balancing
method of deprecation for all newly acquired assets. this change has NO
material effect on the current year's financial statements , if the change is
disclosed in the notes to the financial statements the auditor should issue a
report with a (n)
A. qualified opinion
B. unqualified opinion with explanatory paragraph
C. unqualified opinion
D. qualified opinion with explanatory paragraph regarding consistency
6. An entity changed from straight -line method to the declining-balancing
method of deprecation for all newly acquired assets. this change has material
effect on the current year's financial statements , if the change is disclosed in
the notes to the financial statements the auditor should issue a report with a (n)
E. qualified opinion
F. unqualified opinion with explanatory paragraph
G. unqualified opinion
H. qualified opinion with explanatory paragraph regarding consistency

7. An entity changed from a method to another of deprecation for all newly

acquired assets. this change has material effect on the current year's financial
statements , If the auditor does not agree, the change is a violation of GAAPs
the auditor should issue a report with a (n)
A. qualified opinion
B. unqualified opinion with explanatory paragraph
C. unqualified opinion
D. qualified opinion with explanatory paragraph regarding consistency
8. When the financial statements are fairly stated but the auditor concludes there
is substantial doubt whether the client can continue in existence, the auditor
should issue a (n)
A. adverse opinion
B. qualified opinion only
C. unqualified opinion
D. unqualified opinion with explanatory paragraph
9. the auditor's report contains the following " we did not the financial statements
of EZ, Inc, a wholly owned subsidiary, which statements reflect total assets
and revenues constituting 27 percent and 29 percent , respectively of the
consolidated totals, those statements were audited by other auditors whose
report has been furnished to us and our opinion insofar as it relates to the
amounts including fro EZ, Inc, is based solely on the report of the other
auditors" These sentences
A. indicate a division of responsibility
B. assume responsibility for the other auditor
C. require a departure from an unqualified opinion
D. are an improper from of reporting