Question

A) ideals to work towards, but which are not achievable B) maximum standards that denote excellent work. C) minimum standards of performance that must be achieved on each audit engagement. D) benchmarks to be used on all audits, reviews, and compilations. 8) An audit of historical financial statements most commonly includes the A) balance sheet, statement of retained earnings, and the statement of cash flows B) income statement, the statement of cash flows, and the statement of net working capital C) statement of cash flows, balance sheet, and the statement of retained eamings. D) balance sheet, income statement, statement of cash flows, and the statement of changes in stockholders' equity. e 9) Auditing standards require that the audit report must be titled and that the title must: A) include the word "independent." B) indicate if the auditor is a CPA. C) indicate if the auditor is a proprietorship, partnership, or corporation. D) indicate the type of audit opinion issued. 10) The auditor's responsibility section of the standard unqualified audit report states that the audit is designed To: A) discover all errors and/or irregularities. B) discover material errors and/or irregularities. C) conform to generally accepted accounting principles. D) obtain reasonable assurance whether the statements are free of material misstatement 11) The audit report date on a standard unqualified report indicates: A) the last day of the fiscal period. B) the date on which the financial statements were filed with the Securities and Exchange Commission. C) the last date on which users may institute a lawsuit against either client or auditor. D) the last day of the auditor's responsibility for the review of significant events that occurred after the date of of the financial statements 12) Which of the following is not explicitly stated in the standard unqualified audit report? A) The financial statements are the responsibility of management B) The audit was conducted in accordance with generally accepted accounting principles. C) The auditors believe that the audit evidence provides a reasonable basis for their opinion D) An audit includes assessing the accounting estimates used. The standard unqualified audit report for a non-public entity must (13 A) have a report title that includes the word "CPA B) be addressed to the company's stockholders and creditors C) be dated D) include an explanatory paragraph The management's responsibility section of the standard audit report for a non-public company states (14 t A) the responsibility of the auditor B) the responsibility of management C) the joint responsibility of management and the auditor D) none of the above that the financial statements are 4| Page

Answer 1

8) Solution: balance sheet, income statement, statement of cash flows, and the statement of changes in stockholders' equity

Explanation: The historical financial statements audit usually considers the income statement, balance sheet, cash flows, and the statement of changes in stockholders' equity

　

9) Solution: include the word "independent."

Explanation: The standards of audit report should be titled and that the title needs to be "independent."

　

10) Solution: obtain reasonable assurance whether the statements are free of material misstatement.

Explanation: On standard unqualified report audit report the auditor's responsibility section is designed with an aim to gather assurance that there are free from errors

　

11) Solution: the last day of the auditor's responsibility for the review of significant events that occurred after the date of the financial statements.

Explanation: On standard unqualified report audit report displays the last day for auditor's responsibility on important events review that occurred after the financial statements date

　

12) Solution: The audit was conducted in accordance with generally accepted accounting principles

Explanation: In standard unqualified audit report audit as per GAAP is not explicitly stated

　

13) Solution: be dated

Explanation: For a non-public entity standard unqualified audit report need to be dated

　

14) Solution: the responsibility of management

Explanation: In the non-public company the responsibility section of the standard audit report are responsibilities of management