Which report would not be appropriate for a public accounting firm to provide on financial reporting controls?

Which report would not be appropriate for a public accounting firm to provide on financial reporting controls?

a. unqualified-- no material weaknesses found
b. disclaimer of opinion-- significant deficiencies exist
c. adverse-- material weaknesses exist
d. disclaimer of opinion-- unable to perform all necessary procedures


Answer: b. disclaimer of opinion-- significant deficiencies exist

A material weakness is a situation in which

a. it is reasonably possible that a material misstatement would not be detected on a timely basis
b. it is reasonably possible that an immaterial misstatement would not be detected on a timely basis
c. there is a remote likelihood that a material misstatement would not be detected on a timely basis
d. it is probable that an immaterial financial statement misstatement would not be detected on a timely basis


Answer: a. it is reasonably possible that a material misstatement would not be detected on a timely basis

When planning the audit of internal controls for an issuer, the audit team should

a. identify significant accounts, locations, and assertions
b. re-perform control activities performed by client employees to determine their effectiveness
c. conduct a walkthrough of the internal control process
d. make inquiries of employees regarding the existence of control activities


Answer: a. identify significant accounts, locations, and assertions