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NEW QUESTION: 1
This question presents independent factual situations an auditor might encounter in conducting an audit.
List B represents the report modifications (if any) that would be necessary. Select as the best answer for
each item, the action the auditor normally would take. The report modifications in List B may be selected
once, more than once, or not at all.
Assume:
- The auditor is independent.
- The auditor previously expressed an unqualified opinion on the prior year's financial statements.
- Only single-year (not comparative) statements are presented for the current year.
- The conditions for an unqualified opinion exist unless contradicted in the factual situations.
- The conditions stated in the factual situations are material.
- No report modifications are to be made except in response to the factual situation.
Item to Be Answered
In auditing the long-term investments account, an auditor is unable to obtain audited financial statements
for an investee located in a foreign country. The auditor concludes that sufficient appropriate audit
evidence regarding this investment cannot be obtained.
List B Report Modifications
A. Describe the circumstances within the opinion paragraph without adding an explanatory paragraph.
B. Describe the circumstances in an explanatory paragraph following the opinion paragraph without
modifying the three standard paragraphs.
C. Describe the circumstances in an explanatory paragraph preceding the opinion paragraph and modify
the scope and opinion paragraphs.
D. Describe the circumstances in an explanatory paragraph preceding the opinion paragraph and modify
the opinion paragraph.
E. Describe the circumstances within the scope and opinion paragraphs without adding an explanatory
paragraph.
F. Describe the circumstances in an explanatory paragraph following the opinion paragraph and modify
the scope and opinion paragraphs.
G. Describe the circumstances in an explanatory paragraph preceding the opinion paragraph without
modifying the three standard paragraphs.
H. Issue the standard auditor's report without modification.
I. Describe the circumstances within the scope paragraph without adding an explanatory paragraph.
J. Describe the circumstances in an explanatory paragraph following the opinion paragraph and modify
the opinion paragraph.
Answer: C
Explanation:
Explanation/Reference:
Explanation:
Choice "E" is the correct modification. The situation calls for a qualified opinion or a disclaimer of opinion,
but none of the choices adequately describes a disclaimer. Therefore, a qualified opinion is the best
answer. The circumstances should be described in an explanatory paragraph preceding the opinion
paragraph and the scope and opinion paragraphs should be modified.
NEW QUESTION: 2
A. Option D
B. Option C
C. Option B
D. Option A
Answer: A
Explanation:
You must configure all interfaces in an EtherChannel to operate at the same speeds and duplex modes. Based on the output shown, SW1 is configured to run at 10Mb while SW2 is operating at 100 Mb.
NEW QUESTION: 3
An internal auditor is reviewing the accounts receivable when she discovers account balances more than three years old. The auditor was previously supervising the area during this time,and she subsequently advises the chief audit executive (CAE) of a potential conflict.
Which of the following is the most appropriate course of action for the CAE to take?
A. Withdraw the audit team and outsource the financial audit of the division.
B. Replace the auditor with another audit staff member.
C. Continue with the present auditor,as more than one year has passed.
D. Work with the division's management to resolve the situation.
Answer: B
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