External Audit Chapter 18

1. Who is responsible for the fair presentation of financial statements?

2. What are the common modifications made to the auditors report?

3. What instances result in a modification to the report due to a scope limitation?

4. When audited financial statements contain both current year and prior year financials, what years should the auditors report cover?

5. What is the emphasis of a matter paragraph (explanatory paragraph)? What instances result in this modification to the audit report?

6. What circumstances dictate the issuance of each opinion type (unqualified/unmodified, qualified, adverse, disclaimer)?

7. What circumstances require the auditor to reference issues related to consistency?

8. What are the requirements of a predecessor auditor before reissuing a report on statements presented on a comparative basis?

9. What are the auditors requirements as it relates to referencing the work of others in the auditors report?

10. What are examples of mitigating factors as it relates to a clients ability to continue as a going concern? What are methods auditors use to determine if a client is a going concern?

11. How is the audit report modified for qualified, adverse, and disclaimer of opinions?

12. How is the auditors report affected if the auditor determines that they lack independence with respect to the audit?