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Question
AAA & Associates recently finished auditing LinktheEarth Corporation's internal control over financial reporting. AAA found a number of material weaknesses in the entity's internal control. LinktheEarth's management remediated all of the weaknesses that AAA found. However, the auditors did not have sufficient time to retest the controls. What report should AAA issue with regards to internal control over financial reporting at year-end?
A. Unqualified report.
B. Adverse report.
C. Qualified report.
D. Disclaimer on opinion.
Answer
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Related questions
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Which of the following statements is not true concerning assurance services?
A. The growth in assurance services has been driven in part by users' demands for more relevant information.
B. Assurance services focus on improving the quality of information or its context, for decision makers.
C. Unlike audit and attestation engagements, an engagement to perform assurance services does not require the CPA to consider information reliability.
D. Auditing and attestation services can be viewed as subsets of assurance services since there is overlap in their objectives.
Q:
The report of a CPA on a review of the financial statements of a nonpublic entity should not include a statement that
A. all information included in the financial statements is the representation of the entity's management.
B. the review was performed in accordance with generally accepted auditing standards.
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D. a review consists principally of inquiries of company personnel and analytical procedures applied to financial data.
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Which of the following procedures is not included in a review engagement of a nonpublic entity?
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B. Inquiries regarding significant events subsequent to the balance sheet date.
C. Any procedures designed to identify relationships among data that appear to be unusual.
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During a review of the financial statements of a nonpublic entity, the CPA finds that the financial statements contain a material departure from generally accepted accounting principles. If management refuses to correct the problem, the CPA should
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A. The CPA is liable only to third parties in privity of contract with the CPA.
B. The CPA is liable only to known users of the financial statements.
C. The CPA probably is liable to any person who suffered a loss as a result of the fraud.
D. The CPA probably is liable to the client even if the client was aware of the fraud and did not rely on the opinion.
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An auditor can be held criminally liable for
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D. The observation of physical inventory counts.
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What type of liability has the Private Securities Litigation Reform Act of 1995 created for cases filed under federal statutory law? How did this change from previous legislation? How has this impacted the cases against auditors and the way cases are now presented?
Q:
Section 11 under the Securities Act of 1933 treats claims against auditors more favorably than common law. What two things does a plaintiff need to prove to have a case against the auditor of a company in which she purchased new investments? What does the auditor have to do to have the case dismissed?
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A. is considered an "except for" qualification of the opinion.
B. violates generally accepted auditing standards if this information is already disclosed in footnotes to the financial statements.
C. necessitates a revision of the opinion paragraph to include the phrase "with the foregoing explanation."
D. is appropriate and would not negate the unqualified opinion.
Q:
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A. possibility of purchasing certain assets rather than leasing them.
B. capability of extending the due dates of existing debt.
C. appropriateness of changing depreciation methods from double declining balance to straight line.
D. marketability of property and equipment that management plans to keep.
Q:
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A. periods presented plus the one preceding period.
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Q:
A scope limitation results from an inability to obtain sufficient appropriate evidence about some component of the financial statements.