Question 1:

Which audit opinion (audit report) would be the most appropriate in the following case?

"ABC Co. has decided to lower its provision for bad debts from 4%of sales to 1% of sales because it will add $500,000 more to its profit. You PA, don't agree due to the consistency of the 4% bad debts each year and voice your disagreement with management and the board, who later decide to agree with management".

a) Unmodified/Unqualified with an other matters paragraph

b) Modified/Qualified - GAAP Departure

c) Adverse

d) Disclaimer of opinion

Question 2:

Which audit opinion (audit report) would be the most appropriate in the following case?

You are auditing ABC Co. for the first time. ABC Co. has been in business for several years but has never had an audit before. The company has decided to convert to IFRS standards from its ASPE prepared financial statements since it decided to go public next year. After the audit is completed, you conclude that the current year balance sheet is stated correctly in accordance with IFRS. The client did not authorize you to do test work for any of the previous years.

a) Unmodified/Unqualified

b) Modified/Qualified

c) Disclaimer of opinion

d) Adverse

Question 3:

Which of the fivebalance-relatedaudit objectives is the auditor testing in the following procedure?

"Test the accuracy of the capital assets subsidiary ledger by selecting a sample of capital assets and physically confirming where they are".

a) Existence

b) Completeness

c) Valuation

d) Accuracy