What is an auditor's responsibility for supplementary information, such as segment information, that is outside the basic financial statements

What is an auditor's responsibility for supplementary information, such as segment information, that is outside the basic financial statements, but required by the FASB? 

A. The auditor has no responsibility for required supplementary information as long as it is outside the basic financial statements.
B. The auditor's only responsibility for required supplementary information is to assist in preparing the supplementary information.
C. The auditor is required to read the other information and consider whether such information is consistent with the information in the financial statements.
D. The auditor should apply tests of details of transactions and balances to the required supplementary information and report any material misstatements in such information.


Answer: The auditor is required to read the other information and consider whether such information is consistent with the information in the financial statements.

An engagement to express an opinion on a system of internal control will generally 

A. Only require those procedures already applied in assessing control risk during a financial statement audit.
B. Increase the reliability of the financial statements that have already been audited.
C. Be more extensive in scope than the assessment of control risk made during a financial statement audit.
D. Be more limited in scope than the assessment of control risk made during a financial statement audit.


Answer: Be more extensive in scope than the assessment of control risk made during a financial statement audit.

When audited financial statements are presented in an entity's document containing other information, the auditor should 

A. Perform inquiry and analytical procedures to ascertain whether the other information is reasonable.
B. Add an explanatory paragraph to the auditor's report without changing the opinion on the financial statements.
C. Perform the appropriate substantive auditing procedures to corroborate the other information.
D. Read the other information to determine that it is consistent with the audited financial statements.


Answer: Read the other information to determine that it is consistent with the audited financial statements.

When audited financial statements are presented in a document containing other information, the auditor

When audited financial statements are presented in a document containing other information, the auditor 

A. Has an obligation to perform auditing procedures to corroborate the other information.
B. Is required to issue an "except for" qualified opinion if the other information has a material misstatement of fact.
C. Should read the other information to consider whether it is inconsistent with the audited financial statements.
D. Has no responsibility for the other information because it is not part of the basic financial statements.


Answer: Should read the other information to consider whether it is inconsistent with the audited financial statements.

In a lease that is appropriately recorded as a direct-financing lease by the lessor, the unearned income

a. should be amortized over the period of the lease using the effective interest method.
b. should be amortized over the period of the lease using the straight-line method.
c. does not arise.
d. should be recognized at the lease's expiration.


Answer: should be amortized over the period of the lease using the effective interest method

An auditor may reasonably issue an "except for" qualified opinion for 

A. A scope limitation or an unjustified accounting change.
B. A scope limitation, but not an unjustified accounting change.
C. An unjustified accounting change, but not a scope limitation.
D. Neither an unjustified accounting change nor a scope limitation.


Answer: A scope limitation or an unjustified accounting change.