$1.$ Listed below are several statements concerning reports on audited financial statements. For each statement, note whether it is TRUE or FALSE. If a statement is false, explain why.

a$.$ When emphasis$-$of$-$matter language is added to an unmodified opinion, the audit still must have been performed in accordance with GAAS and the financials must conform to GAAP or some other appropriate financial reporting framework.

b$.$ An auditor$$s standard unmodified report implies that no material changes in principles have occurred.

c$.$ If an auditor concludes that there is substantial doubt about an entity$$s ability to continue as a going concern, the auditor should express a qualified opinion and convey their doubt in an explanatory paragraph.

d$.$ Significant client$-$imposed scope restrictions rarely result in disclaimers.

e$.$ An auditor is not precluded from disclaiming in the face of material uncertainties.

f$.$ An auditor qualifies their opinion for departures from GAAP when the statements contain material or immaterial departures from GAAP.

g$.$ Due to client confidentiality concerns, an auditor should not disclose the dollar effects of a departure from GAAP in the audit report.

h$.$ In the case of an inadequate$-$disclosure qualification, the auditor is required to describe the nature of the omitted disclosure in the audit report.

i$.$ A material change in accounting principle may involve a departure from GAAP; in such instances, an auditor is said to be qualifying due to the change in principle, not the departure from GAAP. $$

j$.$ When disclaiming, an accountant must also:

a$.$ Disclose reasons why the audit was not GAAS

b$.$ Disclose other reservations concerning fair presentation

c$.$ Should not identify any audit procedures performed

k$.$ When reporting on comparative financial statements, a continuing auditor issues as many reports as periods presented.

l$.$ A continuing auditor is indifferent to circumstances that may affect their opinion on prior$-$period statements presented in comparative form.

m$.$ A continuing auditor may in some circumstances issue an updated opinion different than previously expressed.

n$.$ If the auditor issues an updated opinion that is different than previously expressed, the auditor should note or disclose in the updated report$$

a$.$ The fact that the updated opinion differs,

b$.$ The date and type of the previous opinion, and

c$.$ The reason for the change in opinion

o$.$ For nonpublic company engagements, management frequently does not request the predecessor auditor to reissue their report on comparative prior periods presented. If the predecessor auditor$$s report is not reissued in comparative statements, the successor auditor should$$

a$.$ Note in current$-$period report that prior periods were audited by other auditors;

b$.$ Give the date and type of predecessor auditor$$s report;

c$.$ Describe substantive reason for qualification$($s$)$ in predecessor$$s report, if any.

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