Name : Alma Hapsari Fiqo Uli

NIM : 01017210057
Session : Week 3 – Chapter 3 (Audit Reports)

Multiple Choice Questions

3-20 (Objective 3-1, 3-2, 3-4, 3-8)
a. Which of the following is not required element of a standard unmodified opinion audit
report issued in accordance with AICPA auditing standards?
Answer: (4) The signature of the engagement partner

b. The date of the CPA’s opinion on the financial statements of the client should be the
date of
Answer: (1) Completion of all important audit procedures

c. If all principal auditor decides to refer in his or her report to the audit of another auditor,
he or she is required to disclose the
Answer: (4) Portion of the financial statements audited by the author editor

3-21 (Objective 3-4, 3-8)

a. An entity changed from the straight-line method to the declining-balance method of
depreciation for all newly acquired assets. This change has no material effect on the
current year’s financial statements but is reasonably certain to have a substantial effect
in later years. If the change is disclosed in the notes to the financial statements, the
auditor should issue a report with a(n)
Answer: (1) Unmodified opinion

b. 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)
Answer: (4) Unmodified opinion with explanatory paragraph

c. The auditor’s report contains the following: “We did not audit the financial statements
of EZ, Inc., a wholly owned subsidiary, which statements reflects 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 included for EZ, Inc., is based solely
on the report of other auditor.” These sentences
Answer: (2) indicate a division of responsibility
 Discussion Questions and Problems
3-24 (Objective 3-4, 3-5, 3-6, 3-7, 3-8s)
a. Identify which of the conditions requiring a deviation from a standard unmodified
opinion audit report is applicable, if any
b. State the level of materiality as immaterial, material, or highly material. If you cannot
decide the level of materiality, state the additional information needed to make a
decision
c. Given your answers in parts a. and b., state the type of audit report that should be issued.
If you have not decided on one level of materiality in part b., state the appropriate report
for each alternative materiality level

Auto Delivery Company has a fleet of

several delivery trucks. In the past, Auto
Delivery had followed the policy of
purchasing all equipment. In the current Unmodified-
No conditions
year, they decided to lease the trucks. The Material Standard
are applicable
method of accounting for the trucks is Wording
therefore changed to lease capitalization.
This change in policy is fully disclosed in
footnotes.

You are auditing Deep Clean Services for

the first time. Deep Clean has been in
business for several years but over the last
Substantial Unmodified-
two years has struggled to stay afloat given
doubt about the High Material Explanatory
the economic conditions. Based on your
going concern Paragraph
audit work, you have substantial doubt that
Deep Clean will be in business by the end
ofits next fiscal year

One of your audit clients has a material

investment in a privately held biosciences
company. Your audit firm engaged a
business valuation specialist to assist in Unmodified-
No conditions
evaluating the client's estimation of the Material Standard
are applicable
investments fair value. Wording
You conclude that the valuation specialist's
work provides sufficient appropriate audit
evidence

Four weeks after the year-end date, a major

customer of Prince Construction Co.
declared bankruptcy. Because the customer
had confirmed the balance due to Prince at Failure to follow
Highly Material Qualified
the balance sheet date, management refuses GAAP
to charge off the account or otherwise
disclose the information. The receivable
represents approximately 10% of accounts
receivable and 20% of net earnings before
taxes.

During your audit of Raceway.com, Inc.,

you conclude that there is a possibility that
inventory is materially overstated. The Scope
Highly Material Disclaimer
client refuses to allow you to expand the Limitation
scope of your audit sufficiently to verify
whether the balance is actually misstated

You complete the audit of Munich

Department Store, and in your opinion, the
Lack of
financial statements are fairly presented. On
independence Highly Material Unqualified
the last day of the audit, you discover that
Disclaimer
one of your supervisors assigned to the
audit has a material investment in Munich

3-28 (Objective 3-1, 3-3, 3-7, 3-9)

a. How does the information in the preceding paragraphs compare to the information in
the paragraphs under the “Auditor’s Responsibility” heading in the standard
unmodified opinion audit report example for a nonpublic company shown in Figure 3-
1 (p. 72)
Answer:
Ada sejumlah perbedaan antara laporan auditor ISA 700 dan laporan audit opini yang
tidak dimodifikasi untuk entitas nonpublik.

1. Laporan ISA mencatat bahwa audit dilakukan sesuai dengan standar ISA daripada
US GAAS.
2. Laporan ISA mencakup kalimat yang secara eksplisit menyatakan bahwa auditor
independen dan bahwa auditor telah mematuhi Kode IESBA. Satu-satunya referensi
untuk independensi dalam laporan pada Figure 3-1 adalah pada judul laporan.
3. Laporan audit opini tanpa modifikasi untuk entitas nonpublik mencakup deskripsi
tentang apa yang diperlukan audit, termasuk pertimbangan auditor atas
pengendalian internal atas pelaporan keuangan, kebijakan akuntansi, estimasi
akuntansi, dan penyajian laporan keuangan secara keseluruhan. Laporan itu juga
secara eksplisit mencatat bahwa auditor tidak memberikan opini atas pengendalian
internal. Laporan ISA tidak mencakup pengungkapan serupa.
4. Sementara kedua laporan mengakui bahwa auditor memperoleh keyakinan
memadai, laporan ISA memberikan informasi tambahan yang menekankan bahwa
keyakinan memadai bukanlah jaminan.
5. Walaupun kata-katanya berbeda di antara kedua laporan tersebut, baik laporan ISA
maupun laporan audit opini tanpa modifikasi untuk entitas nonpublik mengakui
bahwa audit memerlukan pelaksanaan prosedur untuk memperoleh keyakinan
memadai tentang apakah laporan keuangan bebas dari salah saji material, baik yang
disebabkan oleh kesalahan atau penipuan. Kedua laporan tersebut juga memuat
 pernyataan yang berisi kesimpulan auditor bahwa bukti audit yang diperoleh
memberikan dasar bagi opini yang dikeluarkan.

b. How does the information in the preceding paragraphs compare to the information in
the scope paragraph in the standard unmodified opinion audit report example for a
public company shown in Figure 3-3 (p. 76)
Answer:
Ada sejumlah perbedaan antara laporan auditor ISA 700 dan laporan audit opini standar
yang tidak dimodifikasi untuk perusahaan publik.
1. Laporan ISA mencatat bahwa audit dilakukan sesuai dengan standar ISA daripada
standar audit PCAOB.
2. Laporan ISA mencakup kalimat yang secara eksplisit menyatakan bahwa auditor
independen dan bahwa auditor telah mematuhi Kode IESBA. Laporan audit untuk
perusahaan publik tidak memiliki pengungkapan yang sama.
3. Laporan audit opini tanpa modifikasi untuk perusahaan publik mencakup uraian
singkat tentang apa yang dimaksud dengan audit, termasuk pemeriksaan bukti atas
dasar pengujian dan penilaian atas prinsip akuntansi yang digunakan dan estimasi
signifikan yang dibuat oleh manajemen, dan penyajian laporan keuangan secara
keseluruhan. Laporan ISA tidak mencakup pengungkapan serupa.
4. Sementara kedua laporan mengakui bahwa auditor memperoleh keyakinan
memadai, laporan SA memberikan informasi tambahan tentang itu termasuk
penekanan bahwa keyakinan memadai bukanlah jaminan.
5. Sementara kata-kata berbeda antara kedua laporan, baik laporan ISA dan laporan
audit opini yang tidak dimodifikasi untuk perusahaan publik mengakui bahwa audit
memerlukan pelaksanaan prosedur untuk memperoleh keyakinan memadai tentang
apakah laporan keuangan bebas dari salah saji material, baik yang disebabkan oleh
kesalahan atau penipuan. Kedua laporan tersebut juga memuat pernyataan yang
berisi kesimpulan auditor bahwa bukti audit yang diperoleh memberikan dasar bagi
opini yang dikeluarkan.

c. Discuss whether you believe these paragraph in the ISA audit report improve auditor
communications to users of the financial statements.
Answer:
Pembahasan laporan ISA tentang pentingnya independensi auditor memberikan
penekanan yang lebih eksplisit pada independensi auditor, yang dapat menjadi
pengingat yang berguna bagi pengguna laporan keuangan. Selain itu, diskusi yang
diperluas tentang konsep keyakinan memadai membantu menekankan fakta bahwa
audit bukanlah jaminan bahwa semua salah saji material akan terdeteksi. Sebaliknya,
laporan ISA memberikan sedikit informasi tentang proses audit dan kurangnya
pengungkapan dapat menyebabkan kurangnya pemahaman pengguna tentang aspek-
aspek kunci dari proses audit dan apa yang telah dan belum dilakukan oleh auditor.