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This Question Presents Independent Factual Situations an Auditor Might Encounter

question 1048

Multiple Choice

This question presents independent factual situations an auditor might encounter in conducting an audit. List A represents the types of opinions the auditor ordinarily would issue. Select as the best answer for this item, the action the auditor normally would take. The types of opinions in List A may be selected once, more than once, or not at all. Assume: - The auditor is independent. - The auditor previously expressed an unqualified opinion on the prior year's financial statements. - Only single-year (not comparative) statements are presented for the current year. - The conditions for an unqualified opinion exist unless contradicted in the factual situations. -. The conditions stated in the factual situations are material. - No report modifications are to be made except in response to the factual situation. Item to Be Answered A principal auditor decides to take responsibility for the work of another CPA who audited a wholly-owned subsidiary of the entity and issued an unqualified opinion. The total assets and revenues of the subsidiary represent 17% and 18%, respectively, of the total assets and revenues of the entity being audited. List A Types of Options

Definitions:

Deficit of Electrons

A deficit of electrons occurs in an atom or molecule when it has more protons than electrons, resulting in a positive charge, often referred to as an ionized state.

Anode

The positively charged electrode in an electrochemical cell, where oxidation occurs.

Spike Suppression

Techniques or devices used to protect electronic circuits from transient voltage spikes, preventing damage and ensuring reliability.

Power Supply

A device or system that provides the necessary electrical power to operate or charge devices.