If the auditor has no reservations about management’s financial statements, then the auditor will issue a qualified opinion. Group of answer choices True False
Added by Brooke A.
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An auditor can issue several types of opinions, including unmodified (or unqualified), qualified, adverse, or a disclaimer of opinion. Show more…
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If the financial statements examined by an auditor lead the auditor to issue an opinion that contains an exception that is not of sufficient magnitude to invalidate the statement as a whole, the opinion is said to be unqualified. qualified. exceptional. adverse.
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You are the auditor of LKFG LLC. You audited the accounts receivables using a well-designed sample (using non-statistical sampling as given below) and came up with the following results. You set the tolerable misstatement at $155,000 and expected error at $110,000. Based on this information, and assuming no other misstatements identified in the rest of the audit, what type of audit opinion would you issue? Qualified Opinion Adverse Opinion Disclaimer of Opinion Unqualified Opinion
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1. An audit client has a significant amount of loans receivable outstanding (40% of assets), but has an inadequate internal control system over the loans. The auditor cannot locate sufficient information to prepare an aging of the loans or to identify the collateral for about 75% of the loans, even though the client states that all loans are collateralized. The auditor sent out confirmations to verify the existence of the receivables, but only 10 of the 50 sent out were returned. The auditor attempts to verify the other loans by looking at subsequent payments, but only eight had remitted payments during the month of January, and the auditor wants to wrap up the audit by February 15. The auditor estimates that if only 10 of the 50 loans were correctly recorded, loans would need to be written down by $7.5 million. a. Unmodified b. Modified, qualified c. Modified, disclaimer d. Modified, adverse
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Horngren’s Cost Accounting
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Principles of Accounting Volume 1: Financial Accounting
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