Auditing And Assurance Services
17th Edition
ISBN: 9780134897431
Author: ARENS, Alvin A.
Publisher: PEARSON
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Question
Chapter 3, Problem 29DQP
a.
To determine
Explain the manner in which the given information compares to the information in the Basis for Opinion and Auditor’s Responsibility sections in the standard unmodified opinion audit report.
b.
To determine
Explain the manner in which the given information compares to the information in the Basis for Opinion sections in the standard unmodified opinion audit report.
c.
To determine
Identify three audit reports that provide greater auditor communications to users of the financial statements.
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Which of the following best describes the general contents of the introductory paragraph of the auditors’ report?a. A description of an audit examination, including the fact that the audit was conducted under standards established by the PCAOB.b. The auditors’ conclusion with respect to the fairness of the entity’s financial statements.c. Statements identifying the responsibility of auditors and management in the financial reporting process.d. The auditors’ conclusion with respect to the effectiveness of the entity’s internal control over financial reporting.
Which of the following statements about the auditor's responsibilities in public company audits is true as covered by the PCAOB?
A. The auditor issues an opinion on the financial statements and management issues the opinion on internal control over financial reporting.
B. The auditor issues an opinion on the financial statements only if internal control over financial reporting is found to be effective.
C. The auditor issues an opinion on the financial statements; if those are found to be fairly stated, the auditor proceeds to issue an opinion on internal control over financial reporting.
D. The auditor issues opinions on the financial statements and internal control over financial reporting.
The Sarbanes-Oxley Act achieved all of the following except Select one:
a. Limits the non-audit services an independent auditor may provide to a registrant.
b. Requires regular inspection of audit engagements.
c. Established the PCAOB.
d. Identifies the FASB as the official source of GAAP for SEC filings.
Chapter 3 Solutions
Auditing And Assurance Services
Ch. 3 - Prob. 1RQCh. 3 - Prob. 2RQCh. 3 - Prob. 3RQCh. 3 - Prob. 4RQCh. 3 - Prob. 5RQCh. 3 - Prob. 6RQCh. 3 - Prob. 7RQCh. 3 - Prob. 8RQCh. 3 - Prob. 9RQCh. 3 - Prob. 10RQ
Ch. 3 - Prob. 11RQCh. 3 - Prob. 12RQCh. 3 - Prob. 13RQCh. 3 - Prob. 14RQCh. 3 - Distinguish between a report qualified due to a...Ch. 3 - Prob. 16RQCh. 3 - Prob. 17RQCh. 3 - Prob. 18RQCh. 3 - Prob. 19RQCh. 3 - Prob. 20.1MCQCh. 3 - Prob. 20.2MCQCh. 3 - Prob. 20.3MCQCh. 3 - Prob. 21.1MCQCh. 3 - Prob. 21.2MCQCh. 3 - Prob. 21.3MCQCh. 3 - Prob. 22.1MCQCh. 3 - Prob. 22.2MCQCh. 3 - Prob. 22.3MCQCh. 3 - Prob. 23DQPCh. 3 - Prob. 24DQPCh. 3 - Prob. 25DQPCh. 3 - Prob. 26DQPCh. 3 - Prob. 28DQPCh. 3 - Prob. 29DQP
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- He Select the necessary words from the list of possibilities to complete the following statements. Statements Answer The purpose of an audit conducted in accordance with generally accepted auditing standards is to provide financial statement users with an opinion by the auditor on 1. whether the financial statements are presented fairly, in all material respects, in accordance with the applicable The FASB 2. is the source of authoritative GAAP to be applied by nongovernmental entities. 3. International auditing standards are issued by the An attestation engagement includes a report on subject matter, or on an 4. about subject matter. CPA firms should establish assurance that their services adhere to firm and professional standards. policies and procedures to providearrow_forward7. In an audit in accordance with generally accepted auditing standards, the auditors must test compliance with those laws and regulations that: Group of answer choices Have a direct and material effect on the financial statements. Have a direct and material effect on major federal programs. Have a material direct or indirect effect on the financial statements. Have a material effect on major or nonmajor programs.arrow_forwardAuditors performing audits under the Single Audit Act issue an opinion on whether the Schedule of Expenditures of Federal Awards is fairly stated in all material respects in relation to the F/S taken as a whole. One reason auditors can issue this opinion is that the data used to prepare the Schedule is derived from the underlying accounting records audited. True or falsearrow_forward
- 13. When auditing an entity's financial statements in accordance with Government Auditing Standards (the "Yellow Book"), an auditor is required to report on: I. Recommendations for actions to improve operations. II. The scope of the auditor's tests of compliance with laws and regulations. Group of answer choices I only. II only. Both I and II. Neither I nor II.arrow_forwardWhich of the following is not a part of opinion section of the auditor's report? O a. Identify the title of each statement comprising the financial statements O b. State that the financial statements have been audited as per set standards O C. Auditors signature and address O d. Identify the entity whose financial statements have been audited Coa ENCarrow_forwardThe auditing standard that is relevant to ISA 250, consideration of Laws and Regulations in an audit of financial statements. Could you identify the opinion/s, which is not the objective of ISA 250? a. To obtain sufficient appropriate audit evidence regarding compliance with the provisions of those laws and regulations b. To perform specified audit procedures to help to identify non-compliance with other laws and regulations c. To respond appropriately to non-compliance or suspected non-compliance identified during the audit d. To ignore non-compliance identified during the audit as it is regular practice of entityarrow_forward
- The creation of the PCAOB by the Sarbanes–Oxley Act has affected both the standards-setting process and the periodic review of the quality ofan audit firm’s work.Required:a. Identify the responsibilities of the AICPA, PCAOB, and SEC in the auditing standards-setting process.b. Which standard(s) provide guidance for the audits of public entities? Which standard(s) provide guidance for the audits of nonpublic entities?c. What role do the AICPA and PCAOB play in the periodic review of the quality of audit firms’ work?arrow_forwardA special purpose auditors’ report is used in connection with the independent audit of the following financial information, EXCEPT A. Financial statements prepared in accordance with a comprehensive basis of accounting B. Compliance with contractual agreements C. Specified accounts . elements of accounts or items in a financial statement D. Financial statements prepared in accordance with PFRSarrow_forwardS1: PSA 700 requires a strict order of the elements of an independent auditor's report S2: All audit reports should have a Key Audit Matters paragraph in accordance with PSA 701. S3: PSA 710 defines corresponding figures as amounts and disclosures included in the financial statements in respect of one or more prior periods in accordance with the applicable financial reporting framework O S1 and S2 are true O S2 and S3 are true O All statements are true O All statements are falsearrow_forward
- Which of the following statements is not true with respect to the responsibility for establishing auditing standards? Multiple Choice The PCAOB issues auditing standards for the audit of issuers, subject to SEC approval. Standards issued by the Auditing Standards Board after 2003 apply to the audits of both issuers and nonissuers. The Auditing Standards Board currently issues auditing standards for the audit of nonissuers. Prior to the Sarbanes-Oxley Act, the Auditing Standards Board issued auditing standards for the audits of both issuers aarrow_forwardThe preparation of audit documentation is an integral part of an auditor’s examination of financial statements. On a recurring engagement, auditors review the audit plans and audit documentation from the prior audit while planning the current audit to determine their usefulness for the current-year work.Required:a. (1) What are the purposes or functions of audit documentation? (2) What records may be included in audit documentation?b. What factors affect the auditors’ judgment of the type and content of the audit documentation for a particular engagement?c. What should be included in audit documentation to support auditors’ compliance with generally accepted auditing standards?d. How can auditors make the most effective use of the prior-year audit plans in a recurring audit?arrow_forwardIn auditing, a special purpose auditors’ report is used in connection with the independent audit of the following financial information, EXCEPT A. Financial statements prepared in accordance with a comprehensive basis of accounting B. Compliance with contractual agreements C. Specified accounts elements of accounts or items in a financial statement D. Financial statements prepared in accordance with PFRSarrow_forward
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