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AAA Completion and the auditor's report

ACCA · Strategic Professional · 7 questions

Name: ____________________   Date: ____________

  1. A misstatement is material but not pervasive. The auditor should issue:

    • A A disclaimer of opinion
    • B An adverse opinion
    • C An unmodified opinion
    • D A qualified opinion, 'except for'

  2. A misstatement is material and pervasive. The auditor should issue:

    • A A qualified opinion
    • B An adverse opinion
    • C A disclaimer of opinion
    • D An unmodified opinion

  3. A limit on scope that is material and pervasive leads to:

    • A A disclaimer of opinion
    • B An adverse opinion
    • C A qualified opinion
    • D An emphasis of matter paragraph

  4. A material uncertainty over going concern is adequately disclosed in the financial statements. The audit report should include:

    • A An adverse opinion
    • B A disclaimer
    • C A qualified opinion
    • D An unmodified opinion with a separate section on material uncertainty related to going concern

  5. Key audit matters are communicated in the auditor's report for:

    • A Listed entities
    • B Only small companies
    • C Only public sector bodies
    • D All entities

  6. An emphasis of matter paragraph is used to:

    • A Qualify the opinion
    • B Draw attention to a matter that is fundamental to users' understanding and is appropriately disclosed
    • C Report an error
    • D Disclaim the opinion

  7. Events that occur after the date of the auditor's report but before the financial statements are issued:

    • A Are ignored
    • B Are the responsibility of the regulator
    • C Are not the auditor's responsibility to look for, but must be dealt with if the auditor becomes aware
    • D Must always be audited

Answer key

1. D, 2. B, 3. A, 4. D, 5. A, 6. B, 7. C

  1. Qualified opinions are used for material but not pervasive misstatement, or a limit on scope.

  2. A pervasive effect on the financial statements as a whole means that they do not give a true and fair view.

  3. The auditor cannot obtain sufficient appropriate evidence and so cannot form an opinion.

  4. The disclosure is adequate, so the opinion is not modified, but the matter is highlighted.

  5. They are matters of most significance in the audit that were communicated to those charged with governance.

  6. It does not modify the opinion.

  7. The auditor takes action if a fact becomes known which would have affected the report.