AA E Review and reporting

What are subsequent events?

• 1 Future budgets
• 2 Events between the period end and the date of the auditor's report, and facts that become known later
• 3 Events planned by management
• 4 Events during the year

Which of these is an indicator of going concern problems?

• 1 Recurring losses and a net current liability position
• 2 Strong cash flow
• 3 Increasing orders
• 4 Low gearing

Going concern uncertainty is material and is adequately disclosed. What opinion is given?

• 1 An unmodified opinion with a section on material uncertainty
• 2 A disclaimer
• 3 An adverse opinion
• 4 A qualified opinion

Going concern uncertainty is material but the disclosure is inadequate. What is the result?

• 1 An unmodified opinion
• 2 No report
• 3 A qualified or adverse opinion
• 4 A disclaimer only

A misstatement is material but not pervasive. Which opinion is given?

• 1 A qualified opinion ('except for')
• 2 An unmodified opinion
• 3 An adverse opinion
• 4 A disclaimer

A misstatement is material and pervasive. Which opinion is given?

• 1 A disclaimer
• 2 A qualified opinion
• 3 An adverse opinion
• 4 An unmodified opinion

The auditor cannot obtain sufficient evidence and the possible effects are material and pervasive. What is the opinion?

• 1 An adverse opinion
• 2 A qualified opinion
• 3 An unmodified opinion
• 4 A disclaimer of opinion

What does an emphasis of matter paragraph do?

• 1 It replaces the opinion
• 2 It states the audit fee
• 3 It modifies the opinion
• 4 It draws attention to a matter that is properly presented but fundamental to understanding

What is the purpose of written representations?

• 1 To confirm management's responsibilities and support other evidence
• 2 To set the audit fee
• 3 To report to the tax authority
• 4 To replace audit evidence

Management refuses to provide written representations. What may the auditor do?

• 1 Modify the opinion or withdraw
• 2 Ignore it
• 3 Give an unmodified opinion
• 4 Prepare the representations themselves