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Changes in an estimate, such as a change in the estimated useful life of an asset for depreciation purposes, affect comparability but not consistency, and therefore do not require an explanatory paragraph in the audit report.

True

False

When an auditor concludes that there is substantial doubt about the clients ability to continue as a going concern, an adverse opinion should be issued.

Truer

False

If an auditor is not independent and the auditor knows that the company has not followed generally accepted accounting principles, the auditor should immediately disclaim an opinion and not mention the departure from GAAP in the audit report.

True

False

When a qualified opinion is issued, an explanatory paragraph is added immediately after the opinion paragraph to explain the nature of the qualification that affects the opinion.

True

False

The phrase However, nothing came to our attention that would lead us to question the fairness of the presentations as a part of a disclaimer of opinion is an example of a negative assurance.

True

False

If an audit client has not consistently applied accounting principles, and the auditor does not concur with the appropriateness of the change, either an unqualified or an adverse opinion should be issued, depending on the materiality level involve.

True

False

When an auditor relies upon a different CPA firm to perform part of the audit and chooses to issue a shared opinion, the wording of the report should be modified in all three paragraphs.

True

False

A qualified report is issued when all auditing conditions have been met, no significant misstatements have been discovered, and it is the auditors opinion that the financial statement are fairly stated in accordance with GAAP.

True

False

An auditor should issue a qualified opinion with an explanatory paragraph whenever there is a material uncertainty affecting the financial statements.

True

False

The most common type of audit report is the standard unqualified audit report, which comprises more than 90% of all audit reports issued.

True

False

The audit report is normally addressed to the companys president or chief executive officer.

True

False

The phrase The audit is designed to obtain reasonable assurance about whether the statements are free of material misstatements is included in the inductor paragraph of an audit report.

True

False

The phrase generally accepted accounting principles can be found in the inductor paragraph of a standard unqualified report

True

False

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