If the auditors encounter a significant scope limitation in evaluating a public company`s internal control over financial reporting

If the auditors encounter a significant scope limitation in evaluating a public company`s internal control over financial reporting, which of the following types of opinions on the effectiveness of the company`s internal control over financial reporting would be appropriate?

a. qualified opinion or adverse opinion
b. unqualified opinion or adverse
c. unqualified opinion or disclaimer of opinion
d. disclaimer of opinion


Answer: d. disclaimer of opinion

What document is used to determine the actual amount of direct labor to record on a job cost sheet?

A. Time ticket
B. Payroll register
C. Production order
D. Wages payable account


Answer: A

Which of the following statements is not true with respect to the auditor's report on internal control over financial reporting?

a. the report may be presented with the report on the entity's financial statements as a combined report
b. the auditor will issue an adverse opinion if one or more material weaknesses exist
c. the report will be dated as of the date of the financial statements
d. the report will express an opinion on the effectiveness of internal control over financial reporting


Answer: c. the report will be dated as of the date of the financial statements

When expressing an opinion on a specified account or item in the financial statements, the auditor need only consider that account or item

When expressing an opinion on a specified account or item in the financial statements, the auditor need only consider that account or item. However, the auditor must have audited the entire set of financial statements if this engagement requires a report on the entity's 

A. Net income.
B. Retained earnings.
C. Assets.
D. Working capital.


Answer: Net income

A scope limitation sufficient to preclude an unqualified opinion always will result when management 

A. Prevents the auditor from reviewing the working papers of the predecessor auditor.
B. Engages the auditor after the year-end physical inventory is completed.
C. Requests that certain material accounts receivable not be confirmed.
D. Refuses to provide a representation letter acknowledging its responsibility for the fair presentation of the financial statements in conformity with GAAP.


Answer: Refuses to provide a representation letter acknowledging its responsibility for the fair presentation of the financial statements in conformity with GAAP.

A special report related to compliance with contractual provisions provides 

A. Positive assurance.
B. Negative assurance.
C. No assurance.
D. None of these.


Answer: Negative assurance.