Chapter 3 Solutions ManualWord格式.docx
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3-1Auditor'
sreportsareimportanttousersoffinancialstatementsbecausetheyinformusersoftheauditor'
sopinionastowhetherornotthestatementsarefairlystatedorwhethernoconclusioncanbemadewithregardtothefairnessoftheirpresentation.Usersespeciallylookforanydeviationfromthewordingofthestandardunqualifiedreportandthereasonsandimplicationsofsuchdeviations.Havingstandardwordingimprovescommunicationsforthebenefitofusersoftheauditor’sreport.Whentherearedeparturesfromthestandardwording,usersaremorelikelytorecognizeandconsidersituationsrequiringamodificationorqualificationtotheauditor’sreportoropinion.
3-2Theunqualifiedauditreportconsistsof:
1.ReporttitleAuditingstandardsrequirethatthereportbetitledandthatthetitleincludesthewordindependent.
2.AuditreportaddressThereportisusuallyaddressedtothecompany,itsstockholders,ortheboardofdirectors.
3.IntroductoryparagraphThefirstparagraphofthereportdoesthreethings:
first,itmakesthesimplestatementthattheCPAfirmhasdoneanaudit.Second,itliststhefinancialstatementsthatwereaudited,includingthebalancesheetdatesandtheaccountingperiodsfortheincomestatementandstatementofcashflows.Third,itstatesthatthestatementsaretheresponsibilityofmanagementandthattheauditor'
sresponsibilityistoexpressanopiniononthestatementsbasedonanaudit.
4.Scopeparagraph.Thescopeparagraphisafactualstatementaboutwhattheauditordidintheaudit.Theremainderbrieflydescribesimportantaspectsofanaudit.
5.Opinionparagraph.Thefinalparagraphinthestandardreportstatestheauditor'
sconclusionsbasedontheresultsoftheaudit.
6.NameofCPAfirm.ThenameidentifiestheCPAfirmorpractitionerwhoperformedtheaudit.
7.Auditreportdate.Theappropriatedateforthereportistheendoffieldwork,whentheauditorhasgatheredsufficientappropriateevidencetosupporttheopinion.
Thesamesevenpartsarefoundinaqualifiedreportasinanunqualifiedreport.Therearealsooftenoneormoreadditionalparagraphsexplainingreasonsforthequalifications.
3-3Thepurposesofthescopeparagraphintheauditor'
sreportaretoinformthefinancialstatementusersthattheauditwasconductedinaccordancewithgenerallyacceptedauditingstandards,ingeneraltermswhatthosestandardsmean,andwhethertheauditprovidesareasonablebasisforanopinion.
3-3(continued)
Theinformationinthescopeparagraphincludes:
1.Theauditorfollowedgenerallyacceptedauditingstandards.
2.Theauditisdesignedtoobtainreasonableassuranceaboutwhetherthestatementsarefreeofmaterialmisstatement.
3.Discussionoftheauditevidenceaccumulated.
4.Statementthattheauditorbelievestheevidenceaccumulatedwasappropriateforthecircumstancestoexpresstheopinionpresented.
3-4Thepurposeoftheopinionparagraphistostatetheauditor'
sconclusionsbasedupontheresultsoftheauditevidence.Themostimportantinformationintheopinionparagraphincludes:
1.Thewords"
inouropinion"
whichindicatethattheconclusionsarebasedonprofessionaljudgment.
2.Arestatementofthefinancialstatementsthathavebeenauditedandthedatesthereoforareferencetotheintroductoryparagraph.
3.Astatementaboutwhetherthefinancialstatementswerepresentedfairlyandinaccordancewithgenerallyacceptedaccountingprinciples.
3-5Theauditor'
sreportshouldbedatedFebruary17,2008,thedateonwhichtheauditorcompletedthemostimportantauditingproceduresinthefield.
3-6Anunqualifiedreportmaybeissuedunderthefollowingfivecircumstances:
1.Allstatements—balancesheet,incomestatement,statementofretainedearnings,andstatementofcashflows—areincludedinthefinancialstatements.
2.Thethreegeneralstandardshavebeenfollowedinallrespectsontheengagement.
3.Sufficientevidencehasbeenaccumulatedandtheauditorhasconductedtheengagementinamannerthatenableshimorhertoconcludethatthethreestandardsoffieldworkhavebeenmet.
4.Thefinancialstatementsarepresentedinaccordancewithgenerallyacceptedaccountingprinciples.Thisalsomeansthatadequatedisclosureshavebeenincludedinthefootnotesandotherpartsofthefinancialstatements.
5.Therearenocircumstancesrequiringtheadditionofanexplanatoryparagraphormodificationofthewordingofthereport.
3-7Theintroductory,scopeandopinionparagraphsaremodifiedtoincludereferencetomanagement’sreportoninternalcontroloverfinancialreporting,andthescopeoftheauditor’sworkandopiniononinternalcontroloverfinancialreporting.Theintroductoryandopinionparagraphsalsorefertotheframeworkusedtoevaluateinternalcont