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
