In which of the following circumstances would an auditor most likely add an emphasis of matter
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This preview shows page 4 - 6 out of 22 pages. 15. In which of the following circumstances would an auditor most likely add an Emphasis of Matterparagraph to the auditor's report while expressing an unmodified opinion?A. The auditor is asked to report on a single financial statement (e.g., a statement of financial position).B. There is significant doubt about the entity's ability to continue as a going concern.C. Management's estimates of the effects future events are unreasonable.D.Certain transactions cannot be tested because of management's records retention policy. 16. If an auditor is satisfied that sufficient evidence supports management’s assertions about anuncertainly and its presentation or disclosure, the auditor should Get answer to your question and much more 17.During the year ended December 31, VICTORIA Co.reported its property, plant and equipment atthe lower of cost or market (LCM) because their fair value had declined.The loss has been included inthe income statement and the adjustment has been fully disclosed in the notes.If a CPA believes thatthe values reported in the financial statements are reasonable, what opinion should be expressed? Get answer to your question and much more We have textbook solutions for you!
The document you are viewing contains questions related to this textbook. Financial Accounting: The Impact on Decision Makers Norton/Porter  18. Reference to “financial statements” in PSA 700 (Forming an Opinion and Reporting on FinancialStatements), means Get answer to your question and much more 19. Which of the following statements best describes a compliance framework?a. Compliance framework requires compliance with the requirements of the framework andacknowledges explicitly or implicitly that, to achieve fair presentation of the financial statement, it maybe necessary for management to provide disclosures beyond those specifically required by theframework.B. A compliance framework requires compliance with the requirements of the framework andacknowledges explicitly that it may be necessary for management to depart from a requirement of theframework to achieve fair presentation of the financial statements.C. A compliance framework only requires compliance with the requirements of the framework.D. A compliance framework refers to a financial reporting framework designed to meet the financialinformation needs of specific users. Upload your study docs or become a Course Hero member to access this document Upload your study docs or become a Course Hero member to access this document End of preview. Want to read all 22 pages? Upload your study docs or become a Course Hero member to access this document We have textbook solutions for you!The document you are viewing contains questions related to this textbook. The document you are viewing contains questions related to this textbook. Financial Accounting: The Impact on Decision Makers Norton/Porter Expert Verified Which of the following are circumstances wherein an emphasis of matter paragraph maybe necessary?Examples of circumstances where the auditor may consider it necessary to include an Emphasis of Matter paragraph are: An uncertainty relating to the future outcome of exceptional litigation or regulatory action. on the financial statements. financial position.
What is an emphasis of matter in an audit report?(a) Emphasis of Matter paragraph – A paragraph included in the auditor's report that refers to a matter appropriately presented or disclosed in the financial statements that, in the auditor's judgment, is of such importance that it is fundamental to users' understanding of the financial statements.
Why would an auditor use an emphasis of matter or an other matters paragraph with an unqualified audit report?Emphasis of Matter paragraph may be included in auditor's report when: Auditor believes that there is a need to draw user's attention to significant uncertainty surrounding accounting estimates. In case new or amended audit report has been issued after the discovery of subsequent events.
Why is an emphasis of a matter paragraph is included in the auditor's report?An auditor may conclude that a matter disclosed in the financial statements is so important that it is fundamental to users' understanding of those financial statements. In this case an emphasis of matter paragraph will be included in the auditor's report, which draws the reader's attention to the entity's disclosures.
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