ACC 209 Auditing Exam 1

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ACC 209 Auditing Exam 1
Exam 1

Auditing

ACC 209

Name _____________________________________

1.
Assume you are the partner in charge of the 2007 audit of Becker Corporation,
a private company. The audit report has not yet been prepared. In each
independent situation following (1-8), indicate the appropriate action (a-g) to be
taken. The possible actions are as follows:

a. Issue a standard unqualified report.

b. Qualify both the scope and opinion paragraphs.

c. Qualify the opinion paragraph.

d. Issue an unqualified opinion with an explanatory paragraph.

e. Issue an unqualified opinion with modified wording (no explanatory
paragraph).

f. Issue an adverse opinion.

g. Disclaim an opinion.

The situations are as follows:

Issue an adverse opinion. 1. Becker Corporation carries its property, plant, and
equipment accounts at current market values. Current market
values exceed historical cost by a highly material amount, and the
effects are pervasive throughout the financial statements.

Disclaim an opinion. 2. Management of Becker Corporation refuses to
allow you to observe, or make, any counts of inventory. The recorded book
value of inventory is highly material.

Issue a standard unqualified report 3. You were unable to confirm
accounts receivable with Becker’s customers. However, because of
detailed sales and cash receipts records, you were able to perform
reliable alternative audit procedures.
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Document Details

University
Sault College
Subject
Accounting