FREE AND STUDY GAMES ABOUT A1 EXAM QUESTIONS

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FREE AND STUDY GAMES ABOUT A1 EXAM QUESTIONS

Actual Qs and Ans Expert-Verified Explanation

This Exam contains:

-Guarantee passing score -56 Questions and Answers -format set of multiple-choice -Expert-Verified Explanation Question 1: A CPA concludes that the unaudited F/S on which the CPA is disclaiming an opinion are not in conformity with GAAP because mgmt has failed to capitalize leases.Management refuses to properly disclose the leases, under these circumstances the CPA

would:

Answer:

describe the nature of the departure from GAAP in the report and state the effects on the F/S.Question 2: Jewel CPA, audited infinite Companies prior year financial statements, These are presented with those of the current year for comparative purposes without Jewels auditors

report with a qualified opinion. This years audit report by CRAM CPA, should:

Answer:

Should not name the predecessor auditor, should indicate type of report issued and give reason for the qualification.Question 3: Restrictions imposed by a client prohibit the observation of physical inventories, which account for 35% of all assets. Alternative procedures cannot be applied. The auditor

should issue a:

Answer:

disclaimer of opinion due to the materiality of the asset.

Question 4: Which of the following provides the most authoritative guidance for the auditor of a non issuer.

Answer:

General guidance provided by statement of auditing standards.Question 5: An auditors responsibility to express an opinion on the F/S under US auditing

standards is:

Answer:

Explicitly mentioned in the Auditors responsibility paragraph.Question 6: In which of the following situations would an auditor ordinarily choose between expressing a qualified opinion or an adverse opinion.

Answer:

Inadequate disclosure of the substantial doubt about an entities ability to continue as a going concern is a departure from GAAP, resulting in either a qualified or adverse opinion.Question 7: Jules, CPA, is reporting on comparative F/S, but Shah, CPA, conducted the prior years' audit. Which of the following is not true in this situation?

Answer:

Dual dating may be used to indicate the appropriate dates for each audit.Question 8: An auditor decides to issue a qualified opinion on an entities financial statements because of an entities financial statements because a major inadequacy in its computerized accounting records prevents the auditor form applying necessary procedures.Why?

Answer:

The possible effects on the financial statements.Question 9: In the first audit of a client, an auditor was not a able to gather sufficient evidence about the consistent application of accounting principle between current and prior year as well

as beginning balances of the current year, if material:

Answer:

The auditor would be unable to express an opinion on the current years' results of operations, and cash flows.

Question 10: Under US auditing standards, when an auditor believes there is substantial doubt about the ability of an entity to continue as a going concern, all of the following should be

included in the audit documentation, except:

Answer:

management's conclusion regarding the substantial doubt remains or is alleviated.Question 11: Copper CPA, believes that there is substantial doubt about the ability of Zero corp to continue as a going concern for a reasonable amount of time. In evaluating Zero's plan for

dealing with the adverse effect of the future events, Cooper most likely:

Answer:

would consider postponing expenditures for research and development projects a mitigating factor.Question 12: A auditor is engaged to report on selected financial data that are included in a client prepared document containing audited F/S. Under these circumstances, the report on the

selected data should:

Answer:

Be limited to data derived from the entity's audited F/S's Question 13: When a auditor qualifies an opinion because of the inabilities to confirm a/r by direct communication with debtors, the wording of the basis of qualified opinion paragraph

should indicate:

Answer:

The qualification pertains to the possible effects of the financial statements.Question 14: When reporting on comparative F/S, an auditor ordinarily should change the

previously issued opinion on the prior year's financial statements if the:

Answer:

Prior year's F/S are restated to conform with GAAP.Question 15: How does an auditor make the following representations when issuing the unmodified audit opinion on comparative financial statements?

Answer:

Implicitly for both consistent application of accounting principle and examination of evidence on a test basis.

Question 16: when an auditor expresses an adverse opinion, the opinion paragraph should

include:

Answer:

A direct reference to a separate paragraph disclosing the basis for the opinion.Question 17: which of the following is not true regarding the auditors responsibility for subsequent events?

Answer:

The auditor has an active responsibility to make continuing inquiries between the date of the auditors report and the date on which the report is submitted.Question 18: How does an auditor make the following representations when issuing the standard auditor's report on comparative F/S's?

Answer:

Consistency of application is is implicit, and examination of evidence on a test basis is explicit.Question 19: The auditor concludes that there is substantial doubt about an entity's ability to continue as a going concern for a reasonable period of time. If the entity's disclosures are

adequate, the auditor reporting may include a:

Answer:

disclaimer of opinion (or an unmodified report with an emphasis of matter paragraph).Question 20: An auditor may issue a qualified opinion under which of the following circumstances?

Answer:

Lack of sufficient appropriate audit evidence and restrictions of the scope of the audit.Question 21: Subsequent to the issuance of the report, the auditor becomes aware of facts existing at report date that would have affected the report. After determining the information is

reliable, the auditor should next:

Answer:

Determine whether there are persons relying or likely to rely on the financial statements who would attach importance to the information.