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Acc 410 Week 5 Assignment

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Acc 410 Week 5 Assignment
1. In auditing the long-term investments account, an auditor is unable to
obtain audited financial statements for an investee located in a foreign
country. The auditor concludes that sufficient appropriate audit evidence
regarding this investment cannot be obtained.
In this situation, where the auditor cannot obtain financial statements for
an investee, it would represent a scope of limitation for the auditor. F,
Either a disclaimer of opinion or an "except for" qualified opinion would
be used, or the auditor would have the option to use a disclaimer. The
auditor would use the report modification M, which would describe the
circumstances in an explanatory paragraph following the opinion
paragraph, and modify the scope and opinion paragraphs.
2. Due to recurring operating losses and working capital deficiencies, an
auditor has substantial doubt about an entity’s ability to continue as a
going concern for a reasonable period of time. However, the financial
statement disclosures concerning these matters are adequate.
In this situation, where the auditor has a substantial doubt about an
entity’s ability to continue as a going concern for a reasonable period of
time would lead to B, an unqualified opinion. The auditor would use
report modification I, Describe the circumstances in an explanatory
paragraph following the opinion paragraph without modifying the three
standard paragraphs.
3. 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 percent and 18 percent, respectively, for the
total assets and revenues of the entity being audited.
In this situation, where an auditor decides to take responsibility for the
work of another auditor, the auditor should issue B, an unqualified
opinion. The auditor would use report modification H, Describe the
circumstances in a explanatory paragraph preceding the opinion
paragraph without modifying the three standard paragraphs.

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