Auditing: A Practical Approach 4th Canadian Edition by Robyn Moroney Test bank
AACSB: Analytic
37. Jimmy Bunting, the practitioner at Yanzhou Coal Mining and Minerals, performed the following tasks: he used analytical procedures and he had discussions with management. These activities were a basis for a conclusion on the financial information. What did Jimmy Bunting perform?
a) a qualified report
b) an unmodified opinion
c) a compilation engagement
d) a review engagement
Answer: d
Bloomcode: Comprehension
Difficulty: Easy
Learning Objective: Explain the different levels of assurance.
Section Reference: 1.4 Different levels of assurance
CPA Competency: Audit and Assurance
AACSB: Analytic
38. Which of the following would be an example of a reasonable assurance engagement?
a) the review of annual financial statements
b) the audit of annual financial statements
c) the reporting of procedures performed by the auditor as agreed by the client
d) the compilation of annual financial statements
Answer: b
Bloomcode: Comprehension
Difficulty: Easy
Learning Objective: Explain the different levels of assurance.
Section Reference: 1.4 Different levels of assurance
CPA Competency: Audit and Assurance
AACSB: Analytic
39. The wording of a limited assurance engagement expresses a conclusion that generally states
a) there is nothing wrong with the subject matter.
b) there is something wrong with the subject matter.
c) there is nothing that has come to the attention of the auditors that would lead them to believe that the information being assured is not true and fair.
d) there is something that has come to the attention of the auditors that would lead them to believe that the information being assured is not true and fair.
Answer: c
Bloomcode: Knowledge
Difficulty: Easy
Learning Objective: Explain the different levels of assurance.
Section Reference: 1.4 Different levels of assurance
CPA Competency: Audit and Assurance
AACSB: Analytic
40. In a review engagement, which of the following is least likely to occur during the
engagement?
a) analytical procedures
b) inquiries with management and other personnel
c) substantive audit procedures
d) review of the accounting systems of the entity.
Answer: c
Bloomcode: Knowledge
Difficulty: Easy
Learning Objective: Explain the different levels of assurance.
Section Reference: 1.4 Different levels of assurance
CPA Competency: Audit and Assurance
AACSB: Analytic
41. Maggie Oh performed an audit of a client that had undergone flooding to its operations in St-Jean Sur Richelieu. The client was insured and was able to keep operating. However, there was material damage to the client’s warehouse and Maggie felt it would be appropriate to inform the users of the financial statements of this fact in the audit report. This form of audit report is called
a) an adverse opinion.
b) an unmodified opinion – emphasis of matter.
c) a modified opinion.
d) a disclaimer of opinion.
Answer: b
Bloomcode: Comprehension
Difficulty: Easy
Learning Objective: Outline different audit opinions.
Section Reference: 1.5 Different audit opinions
CPA Competency: Audit and Assurance
AACSB: Analytic
42. Based on the evidence gathered, if an auditor concludes all noted misstatements in the financial statements to be immaterial, individually and collectively, then the auditor would
a) resign from the engagement.
b) emphasize the errors in the audit report.
c) issue an unqualified opinion.
d) issue a qualified opinion.
Answer: c
Bloomcode: Comprehension
Difficulty: Easy
Learning Objective: Outline different audit opinions.
Section Reference: 1.5 Different audit opinions
CPA Competency: Audit and Assurance
AACSB: Analytic
43. An unqualified opinion is also known as a(n)
a) clean opinion.
b) adverse opinion.
c) unmodified opinion.
d) both clean opinion and unmodified opinion.
Answer: d
Bloomcode: Knowledge
Difficulty: Easy
Learning Objective: Outline different audit opinions.
Section Reference: 1.5 Different audit opinions
CPA Competency: Audit and Assurance
AACSB: Analytic
44. An example of an unmodified audit opinion is
a) qualified audit opinion.