the audit opinion formulation process

Chapter 15-16

15-33

Why is the audit report important to the audit opinion formulation process?

15-34

What are the requirements of the AICPA’s Principles 1 and 7 regarding audit reporting?

15-35

Under what circumstances may an auditor express an unqualified opinion when the related financial statements contain a material departure from a FASB standard?

15-36

What conditions must be present for an auditor to be able to issue a standard unqualified audit report similar to the ones presented Exhibit 15.1?

15-37

Review Exhibit 15.2 and identify the timing requirements for U.S. public companies to file audited financial statements with the SEC.

15-38

List the components of a standard unqualified audit report for a U.S. public company.

Chapter 16

16-29

Is it reasonable for the auditor to make judgments about the acceptability of subjective estimates made by the client? If yes, explain the process by which an auditor makes such judgments.

16-30

Are inventory, accounts receivable, and property, plant, and equipment subject to fair value estimates? Explain and state how the fair value concept is applicable to these accounts.

16-31

Review Exhibit 16.2 and identify balance sheet accounts requiring subjective judgments and describe the nature of those judgments.

16-32

What are the differences between the rollover method and the iron curtain method in terms of evaluating uncorrected misstatements?

16-33

Should the materiality of misstatements be considered individually or combined to be considered in aggregate with other misstatements when considering whether the financial statements are misstated? When a misstatement is considered clearly trivial?

16-34

When might a quantitatively small misstatement be considered material?

 

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