ACCT 591 DeVry Week 1 Quiz Latest

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Significant related party transactions are pervasive.
Usual trade credit from suppliers is denied.
Arrearages in preferred stock dividends are paid.
Restrictions on the disposal of principal assets are present.
Question 5.5.(TCO E) (CPA-02566.B) When an independent CPA assists in preparing the financial statements of
a publicly held entity but has not audited or reviewed them, the CPA should issue a disclaimer of opinion. In such
situations, the CPA has no responsibility to apply any procedures beyond (Points : 10)
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Documenting that internal control is not being relied on.
Reading the financial statements for obvious material misstatements.
Ascertaining whether the financial statements are in conformity with GAAP.
Determining whether management has elected to omit substantially all required disclosures.
Question 6.6.(TCO E) (CPA-04621.B) As of August 13, a CPA had obtained sufficient appropriate audit evidence
with respect to fieldwork on an engagement to audit financial statements for the year ended June 30. On August 27,
an event came to the CPA's attention that should be disclosed in the notes to the financial statements. The event was
properly disclosed by the entity, but the CPA decided not to dual date the auditor's report and dated the report August
27. Under these circumstances, the CPA was taking responsibility for(Points : 10)
o All subsequent events that occurred through August 27.
o Only the specific subsequent event disclosed by the entity.
o All subsequent events that occurred through August 13 and the specific subsequent event disclosed by the
entity.
o Only the subsequent events that occurred through August 13.
Question 7.7.(TCO E) (CPA-02820.B) Which of the following is not an example of the application of professional
skepticism? (Points : 10)
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Designing additional auditing procedures to obtain more reliable evidence in support of a particular financial
statement assertion
Obtaining corroboration of management's explanations through consultation with a specialist
Inquiring of prior year engagement personnel regarding their assessment of management's honesty and
integrity
Using third-party confirmations to provide support for management's representations
Question 8.8.(TCO E) (CPA-02749.B) An auditor includes a separate paragraph in an otherwise unmodified report
to emphasize that the entity being reported on had significant transactions with related parties. The inclusion of this
separate paragraph (Points : 10)
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Is considered an "except for" qualification of the opinion.
Violates generally accepted auditing standards if this information is already disclosed in footnotes to the
financial statements.
Necessitates a revision of the opinion paragraph to include the phrase "with the foregoing explanation.”
Is appropriate and would not negate the unqualified opinion.
Question 9.9.(TCO E) (CPA-02444.B) An auditor most likely would express an unqualified opinion and would not
add explanatory language to the report if the auditor (Points : 10)
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Wishes to emphasize that the entity had significant transactions with related parties.
Concurs with the entity's change in its method of computing depreciation.
Discovers that supplementary information required by FASB has been omitted.
Believes that there is a probable likelihood of a material loss resulting from an uncertainty that is sufficiently
supported and disclosed.