Saturday, May 12, 2012

Auditing

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1. The auditor’s report indicates whether the financial Statements comply with generally accepted accounting principles. The auditor’s report also state other information related to the financial statements that have not been included. Thirdly the auditor states whether there is any irregularities in the audit examination.


4. When the Financial statements contain a departure from GAAP, including an adequate disclosure, the auditor will have to choose between a qualified , unqualified or adverse opinion. The auditor may bring additional information on important information to the Users.


5. If the report is immaterial the auditor reserves the right to treat it as if the departure did not exist. The auditor must qualify the opinion if the departure is sufficient enough.


6. The rule states that the auditor shall not state that the financial statements are presented in conformity with GAAP or () state that they are not aware of any material modifications that should be made to such statements or data in order for them to be in conformity with GAAP, if such statements or data contain any departure from an accounting principle promulgated by bodies designated by council to establish such principles that has a material effect on the statement taken as a whole. Rule 0 allows financial statements to have a departure from an FASB or GASB statement, permitting the auditor to explain why the departure is in conformity with GAAP.


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. If Auditor is not independent then they should not claim an opinion in regards to the financial statements, because they are not in accordance with GAAP.


1. Circumstances that are not considered inconsistencies in an audit include, changes in accounting estimates, changes in classifications of financial amounts, changes in the subsidiaries included in consolidated financial statements, selling or liquidating a company and error corrections.


15. An update audit report is an adjustment to a previous years financial statements included in the current year’s financial statement report.


17. They are prohibited because it too condensed to allow a fully descriptive report.


1. A


0. D


1. A


. C


. D


4. B


5. A


6. A


7. D


8. A


. Introductory Paragraph- Our responsibility is to express an opinion on the following financial statements


Scope Paragraph- We believe that that our audits provide a reasonable basis for our opinion


Opinion- Should be for both September 0, 001 and 000


0. A. this will affect the scope paragraph of the audit report


B. Departure from GAAP


C. Departure from GAAP


D. No effect





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