Which of the following procedures would an auditor ordinarily perform during the review of subsequent events?
An annual shareholders' report includes audited financial statements and contains supplementary information required by GAAP. Is it permissible for the auditor to report on such information?
It is not appropriate to refer a reader of an auditor's report to a financial statement footnote for details concerning:
Morris, CPA, suspects that a pervasive scheme of illegal bribes exists throughout the operations of Worldwide Import-Export, Inc., a new audit client. Morris notified the audit committee and Worldwide's legal counsel, but neither could assist Morris in determining whether the amounts involved were material to the financial statements or whether senior management was involved in the scheme. Under these circumstances, Morris should:
Does an auditor make the following representations explicitly or implicitly when issuing the standard auditor's report on comparative financial statements?
This question presents independent factual situations an auditor might encounter in conducting an audit. List B represents the report modifications (if any) that would be necessary. Select as the best answer for each item, the action the auditor normally would take. The report modifications in List B may be selected once, more than once, or not at all.Assume:- The auditor is independent.- The auditor previously expressed an unqualified opinion on the prior year's financial statements.- Only single-year (not comparative) statements are presented for the current year.- The conditions for an unqualified opinion exist unless contradicted in the factual situations.- The conditions stated in the factual situations are material.- No report modifications are to be made except in response to the factual situation.Item to Be Answered -A principal auditor decides to take responsibility for the work of another CPA who audited a wholly-owned subsidiary of the entity and issued an unqualified opinion. The total assets and revenues of the subsidiary represent 17% and 18%, respectively, of the total assets and revenues of the entity being audited.List B -Report Modifications -
