审计 高级审计 CPA Australia AAA-5-esat

Question 5

The directors of your client (a company listed on the stock exchange) refuse to disclose directors’ remuneration of $500 000 on the basis that it is not quantitatively material. Net profit after tax is $20 million and net assets total $50 million. What is the appropriate auditor’s report?

a.An unmodified opinion.

b.An unmodified opinion with an Emphasis of Matter paragraph.

c. A disclaimer of opinion.

d. A qualified opinion.

Question 6

A client is facing significant litigation as a result of a claim that it dumped oil in the ocean. This is a significant issue, which the auditor agrees is adequately disclosed in the notes to the financial statements. The appropriate auditor’s report is

a.an unmodified opinion with an Emphasis of Matter paragraph.

b. a qualified opinion.

c. a disclaimer of opinion.

d.an adverse opinion.

Question 7

Information on key performance indicators contained in the client’s annual report is inconsistent with the audited financial statements. Your client refuses to alter this information. What is the appropriate

auditor’s report?

a. A qualified opinion.

b.An unmodified opinion with an Other Matter paragraph.

c.An unmodified opinion with an Emphasis of Matter paragraph.

d.An unmodified opinion.

Question 8

An auditor has been unable to obtain audited financial statements for the entity’s major foreign subsidiary

due to civil unrest in that country. This may have a pervasive effect on the consolidated financial statements. The appropriate auditor’s report for the consolidated financial statements is

a.an unmodified opinion with an Emphasis of Matter paragraph.

b. a disclaimer of opinion.

c. a qualified opinion.

d.an adverse opinion.

Question 9

An entity operates in a highly regulated industry with special legislated reporting requirements. It has complied with these reporting requirements. However, this has resulted in the entity not complying with the requirements of some International Financial Reporting Standards. The notes to the financial statements claim that the financial statements have been prepared in accordance with both the special legislated reporting requirements and International Financial Reporting Standards. What type of audit opinion should be issued?

a.

An adverse opinion. b.

A qualified opinion. c.

An unmodified opinion with an Emphasis of Matter paragraph. d.Both an unmodified and a qualified opinion.

Question 10

An entity is being sued for substantial damages for producing a faulty product. However, while the result of the litigation will not be known for some time, the entity believes that the claim is unjustified and that it will be successful in defending the action. As a result, it has not included any reference to the lawsuit in the financial statements. The audit firm’s independent legal advice suggests that the outcome of the case is unclear. What type of audit opinion should be issued?

a.

A disclaimer of opinion. b.

A qualified opinion. c.

An unmodified opinion with an Emphasis of Matter paragraph. d.An unmodified opinion with an Other Matter paragraph.

Question 11

How are the governing body’s responsibility and the auditor’s responsibility represented in the auditor’s report?

a.

I. b.

II. c.

III. d.IV.

Question 12

If a company’s external auditor expresses an unmodified opinion as a result of the audit of the company’s financial statements, readers of the auditor’s report can assume that

a.

the external auditor found no errors or fraud. b.

the company is financially sound and the financial statements are accurate. c.

the internal controls are effective. d.all material disagreements between the company and the external auditor about the application of

accounting principles were resolved to the satisfaction of the external auditor.

Governing body’s responsibility Auditor’s responsibility I.

Explicitly Explicitly II.

Implicitly Implicitly III.

Implicitly Explicitly IV.

Explicitly

Implicitly

Question 13

Under which one of the following circumstances would a disclaimer of opinion not be an appropriate option?

a.The chief executive officer is unwilling to sign the management representation letter.

b.The auditor is unable to determine the amounts associated with an employee fraud scheme.

c.Management does not provide reasonable justification for a change in accounting principles.

d.The auditor is unable to verify the account balances of a major subsidiary.

Question 14

Which one of the following statements is correct in relation to concise financial reports undertaken in accordance with the Corporations Act 2001 (Cwlth) in Australia?

a.The audit of a concise financial report should be treated as a separate engagement from the audit of the

full financial statements.

b.It is not necessary for the auditor to undertake any additional audit procedures for the audit of a concise

financial report beyond those required to express an opinion on the full financial statements.

c.The audit opinion paragraph for a concise financial report is worded the same as the audit opinion

paragraph for an audit of the financial statements.

d.It is not possible to issue an Emphasis of Matter paragraph on a concise financial report.

Question 15

Which one of the following wordings would you expect to see in an auditor’s opinion on a reasonable assurance engagement undertaken to determine compliance with a compliance framework?

a.The financial statements are presented fairly, in all material respects, in accordance with the applicable

financial reporting framework.

b.The financial statements are prepared, in all material respects, in accordance with the applicable financial

reporting framework.

c.The financial statements give a true and fair view of … in accordance with the applicable financial

reporting framework.

d.Nothing has come to my attention to suggest that the financial statements are not prepared in

accordance with the applicable financial reporting framework.

Question 16

You are undertaking a review of interim financial information for ABC Ltd (ABC), for which you are also its independent auditor. Which one of the following procedures would not normally be part of the review?

a.Enquiry of management’s identification of events that require disclosure or adjustment.

b.Testing of computer controls over major transactions cycles.

https://www.360docs.net/doc/b51132061.html,parison of draft financial statements with budget.

d. A discussion of whether the governing body has changed the way it assesses ABC’s ability to continue

as a going concern.

Question 17

For which of these engagements is assurance not provided?

https://www.360docs.net/doc/b51132061.html,pilation engagement.

II.Agreed-upon procedures engagement.

III.Review of financial information where the assurance provider is not the auditor of the entity.

a.I and II only.

b.I and III only.

c.II and III only.

d.I, II and III.

Question 18

You are issuing a report for an agreed-upon procedures engagement related to management’s report about an entity’s compliance with specified environmental requirements. Your report should contain which one of

the following?

a. A statement that the procedures undertaken are your responsibility and are sufficient for the purposes

of the engagement.

b. A negative assurance statement that there is no evidence that management did not comply with

environmental requirements.

c. A statement that the distribution of the report will be restricted to specifically identified parties.

d.An opinion about whether management’s assertion on environmental compliance is fairly stated.

Solutions

Question 1

Correct Answer: d

This will result in a scope limitation sufficient to preclude an unmodified opinion. Requested written representations not being provided is considered in ISA 580, paras 19–20. In particular, ISA 580, para. 20, states that the auditor shall disclaim an opinion on the financial statements if management does not provide required written representations.

Source: Topic heading—‘Types of auditor’s reports’.

Question 2

Correct Answer: a

This is a scope limitation which will result in either a qualified or a disclaimer of opinion being issued.

The distinction between a qualified and a disclaimer will depend on whether the auditor considers the limitation to be potentially material and pervasive.

Source: Topic heading—‘Types of auditor’s reports’.

Question 3

Correct Answer: d

This is a situation where the financial statements are materially misstated as a result of the inappropriate application of an accounting standard, the effects of which are material but are not expected to be pervasive to the financial statements.

Source: Topic heading—‘Types of auditor’s reports’.

Question 4

Correct Answer: c

This is a situation where the financial statements are materially misstated as a result of the inappropriate application of an accounting standard. The amount is material but not pervasive to the financial statements. Therefore, a qualified opinion is required.

Source: Topic heading—‘Types of auditor’s reports’.

Question 5

Correct Answer: d

This is a situation where the financial statements are materially misstated over the required disclosure of an amount. Directors’ emoluments must be disclosed irrespective of the amount involved. Therefore, it is material by nature, but not pervasive and a qualified opinion is required.

Source: Topic heading—‘Types of auditor’s reports’.

Question 6

Correct Answer: a

This represents a significant uncertainty which the auditor agrees is adequately disclosed in the notes to the financial statements and, therefore, an unmodified opinion with an Emphasis of Matter paragraph is required.

Source: Topic heading—‘Types of auditor’s reports’.

Question 7

Correct Answer: b

Where supplementary information is inconsistent with the financial statements and the supplementary information is incorrect, an unmodified opinion with an Other Matter paragraph is required as outlined in

ISA 720, para. 10.

Source: Topic heading—‘The auditor’s responsibilities relating to other information in documents containing audited financial statements’.

Question 8

Correct Answer: b

The inability to obtain audited financial statements supporting the entity’s investment in its major subsidiary is an extreme scope limitation which would result in a disclaimer of opinion.

Source: Topic heading—‘Types of auditor’s reports’.

Question 9

Correct Answer: d

The auditor’s report would be unmodified in respect of the entity’s compliance with the legislative requirements, but modified in respect of compliance with International Financial Reporting Standards.

Source: Topic heading—‘Types of auditor’s reports’.

Question 10

Correct Answer: b

The auditor’s report would be modified on the basis of a lack of disclosure and as the effect is material but not extreme, the auditor’s report would be a qualified opinion.

Source: Topic heading—‘Types of auditor’s reports’.

Question 11

Correct Answer: a

The auditor’s report explicitly states that the financial statements are the responsibility of the governing body and the auditor’s responsibility is to express an opinion on it.

Source: Topic heading—‘Reporting responsibilities for audits of financial statements’.

Question 12

Correct Answer: d

The auditor must state whether the financial statements are presented in conformity with the identified financial reporting framework.

Source: Topic heading—‘Types of auditor’s reports’.

Question 13

Correct Answer: c

An unjustified accounting change is a disagreement with management and would result in a qualified or adverse opinion. All other situations are scope limitations which may give rise to a disclaimer of opinion.

Source: Topic heading—‘Types of auditor’s reports’.

Question 14

Correct Answer: a

The audit of the concise financial report should be treated as a separate engagement from the audit of the full financial statements.

Source: Topic heading—‘Audits of specialised areas’.

Question 15

Correct Answer: b

The most common wording contained in the auditor’s report for a reasonable assurance engagement

when determining compliance with a compliance framework is that the financial statements are prepared in accordance with the framework. The wording in answers A and C are the wording commonly associated with a fair presentation framework, while the wording in answer D is the wording commonly used for a limited assurance engagement.

Source: Topic heading—‘Fair presentation and compliance frameworks (true and fair override)’.

Question 16

Correct Answer: b

The assurance provider does not normally undertake tests of controls as part of a limited assurance engagement. The procedures that are undertaken for limited assurance engagements are principally enquiries

of company personnel (answers A and D) and analytical procedures (answer C).

Source: Topic heading—‘Reports providing limited assurance’.

Question 17

Correct Answer: a

Compilation and agreed upon procedures engagements do not provide assurance, whereas the review of financial information where the assurance provider is not the auditor of the entity provides limited assurance.

Source: Topic heading—‘Reports providing no assurance’.

Question 18

Correct Answer: c

Agreed-upon procedures engagements require a statement that the distribution of the report will be restricted to specified parties (ISRS 4400, para. 5/ASRS4400, para. 24). Answer A is incorrect as an agreed-upon procedures engagement should contain a statement that the procedures performed were those agreed with the recipient. Answer B is a conclusion related to a limited assurance engagement, while answer D is a conclusion related to a reasonable assurance engagement.

Source: Topic heading—‘Reports providing no assurance’, ‘Agreed-upon procedures’.