Circumstances where the auditor is justified in qualifying the audit report because of an inability to obtain sufficient appropriate audit evidence would not include which of the following?Group of answer choicesthe auditor runs out of time to follow normal auditing procedures because it has scheduled too many clients for audit in the final month of the audit periodthe auditor is appointed after the count of physical inventories has occurredthe auditor is not able to obtain sufficient appropriate audit evidence about an associated entitywhere a fire has destroyed the entity’s accounting records

Use the accompanying solution sheet to reply to the eight situations below that relate to the audit of financial statements of nonpublic companies. Unless indicated otherwise, assume that material amounts are involved. Do not consider including an emphasis-of-matter paragraph in an "auditor discretionary" circumstance. Situations: A company has departed from GAAP. A company's inventory records were deficient and the auditor was required to satisfy herself that the inventory was properly stated using alternative procedures. She is satisfied that she has sufficient appropriate evidence. In auditing a client, an auditor has determined that substantial doubt exists about an entity's ability to continue as a going concern. A group auditor decides not to take responsibility for the work of the component auditor who audited a 70% owned subsidiary and issued an unmodified opinion. The total assets and revenues of the subsidiary are 5% and 8%, respectively, of the total assets and revenues of the entity being audited. A company changes from FIFO to LIFO for inventory valuation and the auditor concurs with the change. The change has a material effect on the comparability of the entity's financial statements this year, but is expected to have an immaterial effect in the future. Inadequate record retention policies by the client have resulted in a situation in which a CPA is unable to obtain sufficient appropriate audit evidence with respect to a material account. A CPA has decided to emphasize in the audit report that the company she audited is a component of XYZ Company, its parent. A client has changed its estimate of likely doubtful accounts from 2% of credit sales to 3%. The auditor believes the change to be reasonable. Reply as to the type of opinion and other modification to the audit report as follows: A. Adverse D. Disclaimer Q. Qualified U. Unmodified Other Modification EOM Add an emphasis-of-matter paragraph. OM Add an other-matter paragraph. BFM Add a basis for modification paragraph. OTHER Make modifications other than adding an additional paragraph. NONE Make no modifications. If more than one type of opinion is appropriate list each—one with "Report 1" and one with "Report 2." If only "Report 1" is appropriate, place an X in the "Report 2" Opinion Type cell, which indicates no second type of report is appropriate. Situation Opinion Type Other Modification BEM BEM NONE 1 A U 2 X EOM 3 D BEM OTHER U 4 Report 1 Report 2 Report 1 Report 2 Re I Don't Know If My Answers Are Correc

Which of the following is not an inherent limitation of an audit? Group of answer choicesaudit testing of selective samplesforming professional judgements in highly specialised areasauditor independencetime lapse between the balance date and the presentation of the audit report

Which of the following factors is most important in determining the appropriations of audit evidence? A. The quantity of audit evidence B. The reliability of audit evidence and its relevance in meeting the audit objective C. The objectivity and integrity of the auditor D. The independence of the source of evidence

The competence of evidence available to an auditor is least likely to be affected bySelect one:a.The relevance of such evidence to the financial statement assertion being investigated.b.The relationship of the preparer of such evidence to the entity being audited.c.The sampling method employed by the auditor to obtain a sample of such evidence.d.The timeliness of such audit evidence.

An auditor would issue an adverse opinion ifSelect one:a.A qualified opinion cannot be given because the auditor lacks independence.b.The audit was begun by other independent auditors who withdrew from the engagement.c.The statements taken as a whole do not fairly present the financial condition and results of operations of the company.d.The restriction on the scope of the audit was significant.