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Question(s) / Instruction(s):

ACC3118

1) The dollar amount of some misstatements cannot be accurately measured. For example, if the

Clients were unwilling to disclose an existing lawsuit, the auditor must estimate:

A) Its effect on management’s future decisions.

B) Its effect on net income.

C) Its effect on users of the financial report.

D) Its effect on the auditor’s exposure to lawsuits.

 

2) When an adverse, qualified or disclaimer of opinion is issued, ASA 701 requires that the auditors’

Report includes:

A) A clear description of the substantive reasons for the opinion.

B) Where practicable, a quantification of the possible effect on the financial report.

C) Both A and B.

D) Neither A or B.

 

3) The audit report date indicates:

A) The last day of the financial period.

B) The last date on which users may institute a lawsuit against either client or auditor.

C) The date on which the financial report were filed with ASIC.

D) The last day of the auditor’s responsibility for the review of significant events that occurred

After the date of the financial statements

 

4) The least severe type of report for disclosing departures from an unqualified report is the:

A) Adverse opinion.

B) Qualified opinion.

C) Disclaimer of opinion.

D) Report on unaudited financial statements.

 

5) The profession recognizes the need for uniformity in reporting. Why?

A) Users would have considerable difficulty interpreting the meaning of an auditor’s report if

Each was an original creation.

B) As a means of avoiding confusion.

C) ASA 700 and ASA 701 have defined and enumerated the types of audit reports that should

Be included with general-purpose financial reports.

D) all of the above.

 

6) Goods Pty Ltd’s financial report shows a profit increase of 20% on the previous year. The

Chairman’s report in Goods Pty Ltd’s annual report boasts of a 50% increase in profit from the

Previous year.The auditors report should include:

A) A qualified opinion.

B) an except for qualified opinion.

C) An emphasis of matter section.

D) An adverse opinion.

 

7) When there is a material inconsistency between the financial report and other information in the

Annual report and the auditee refuses to change the information, the auditor should:

A) Advice ASIC and the ASX.

B) Do nothing as the audit opinion is confined to the financial report.

C) Issue a qualified opinion.

D) Include an emphasis of matter section in the audit report.

 

8) Angel Pty Ltd’s financial report includes two Balance Sheets and Profit and Loss accounts. One set

Is drawn up in accordance with applicable accounting standards and the other set is drawn up

Without complying with one standard, which the directors consider makes the accounts

Misleading. The auditors concur. The audit report should therefore contain:

A) A disclaimer of opinion.

B) An unqualified opinion with an emphasis of matter section.

C) An exception opinion with an emphasis of matter section.

D) An adverse opinion.

 

9) An disclaimer of opinion is issued whenever the auditor:

A) Believes that the overall financial report is not presented fairly.

B) Has determined that the financial report is presented fairly.

C) Has been unable to determine whether the overall financial report is presented fairly.

D) Believes that some material part(s) of the financial report are not presented fairly.

 

10) It is more difficult to evaluate the materiality of potential errors resulting from a scope limitation

Than from a:

A) Conflict between applicable reporting frameworks.

B) Disagreement with management.

C) Both A and B.

D) Neither A nor B.

 

 

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