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Unmodified Opinion Audit Reports Quiz

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Questions and Answers

Select condition that would not require a departure from an unmodified opinion audit report.

financial statements not prepared in accordance with GAAP

financial statements are presented in accordance with GAAP (correct)

the auditor is not independent

scope of audit has been restricted

Select the best option to protect an auditor when a material misstatement has not been detected in a financial statement audit.

as effectively as reasonably possible

in accordance with GAAP (correct)

in a timely manner

only after an adequate investigation of the management team

The management assertion related to account balances at period end for the assertion of existence is that

Assets, liabilities, and equity interests are included in the financial statements at appropriate amounts and any resulting valuation adjustments are appropriately recorded.

The entity holds or controls the rights to assets and the liabilities are the obligation of the entity.

All assets, liabilities, and equity interests that should have been recorded have been recorded.

Assets, liabilities, and equity interests exist. (correct)

The management assertion related to account balances at period end for the assertion of completeness is that

All assets, liabilities, and equity interests that should have been recorded have been recorded. Signup and view all the answers

The management assertion related to account balances at period end for the assertion of valuation and allocation is that

Assets, liabilities, and equity interests are included in the financial statements at appropriate amounts and any resulting valuation adjustments are appropriately recorded. Signup and view all the answers

The management assertion related to account balances at period end for the assertion of rights and obligations is that

The entity holds or controls the rights to assets and the liabilities are the obligation of the entity. Signup and view all the answers

The management assertion of occurrence, related to classes of transactions and events for the period under audit, is defined as

Transactions and events that have been recorded have occurred and pertain to the entity. Signup and view all the answers

The management assertion of cutoff, related to classes of transactions and events for the period under audit, is defined as

Transactions and events have been recorded in the correct accounting period. Signup and view all the answers

The management assertion of classification, related to classes of transactions and events for the period under audit, is defined as

Transactions and events have been recorded in the proper accounts. Signup and view all the answers

The management assertion of completeness, related to classes of transactions and events for the period under audit, is defined as

All transactions and events that should have been recorded have been recorded. Signup and view all the answers

Study Notes

Auditor's Report and Management Assertions

A condition that would not require a departure from an unmodified opinion audit report is when a material misstatement has not been detected in a financial statement audit.

Management Assertions for Account Balances

Existence: Management asserts that account balances exist at period end.
Completeness: Management asserts that all account balances that should exist at period end are recorded.
Valuation and Allocation: Management asserts that account balances are valued correctly and allocated properly at period end.
Rights and Obligations: Management asserts that account balances represent the entity's rights and obligations at period end.

Management Assertions for Transactions and Events

Occurrence: Management asserts that transactions and events have occurred during the period under audit.
Cutoff: Management asserts that transactions and events have been recorded in the correct period.
Classification: Management asserts that transactions and events have been recorded in the proper accounts.
Completeness: Management asserts that all transactions and events that have occurred during the period under audit have been recorded.

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Description

Test your knowledge on conditions that would not require a departure from an unmodified opinion audit report. Choose the correct options to understand the criteria for issuing an unmodified opinion audit report.