AA Chapter 5 Questions
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Question 4 – does the audit opinion imply the fact, that ALL transaction have been recorded and are reflected in the financial statements?
With reference to principle of “reasonables” it’s not the thing that is implied by audit opinion )
Re your first sentence – no – only all/everything that is MATERIAL (and with reasonable assurance only). I don’t understand your second sentence – please use the Ask the tutor forum for technical queries – this space is provided only for comment.
Kindly explain q4 , doesn’t an unmodified audit opinion imply that no frauds occurred during the financial period in which the statements were audited?
NO – see page 30 of the notes:
3.10 Auditor’s responsibilities
The auditors’ responsibilities are to obtain REASONABLE ASSURANCE about whether the financial
statements as a whole are free from MATERIAL misstatement, whether due to fraud or error, and to issue
an auditor’s report that includes their opinion.
Reasonable assurance is not a guarantee and the financial statements can – and will – include immaterial misstatements (whether due to error or fraud) when the audit opinion is unmodified. You should find this reinforced in your later studies.
Noting that “no frauds occurred during the financial period” is “absolute”!
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last is correct anser
i think the last question correct answer is a, because basis opinion is placed before opinion
Basis of Opinion is AFTER the Opinion
Brother the correct answer is (D) since the paragraph Basis for QUALIFIED opinion will come only when the opinion it self is qualified. Because the Basis of opinion will be changed according to what auditor has decided weather it is modified, unmodified, adverse or a disclaimer so if the auditor opinion is Qualified then the basis of opinion will be changed into basis for qualified opinion. Kindly note that examiner will confuse you in the exam with this kind of questions. Hope you got it.
NO to suggestion that answer is (a) – see section 3 of chapter 5 of the notes – Opinion (any) is always first – followed by Basis for that opinion.
Q6. In the answer does the “statement” represent a single para or a whole different statement?
It means a statement of fact – in a sentence/paragraph – not to be confused with a “financial statement” (for example).
Last Questions answer wrongly formatted into the system
Last two both answers are correct answer
Formatting looks fine to me so I don’t know what you mean.
If you are referring to Q8 the 2nd to last answer is NOT correct – again see the notes – an EoM will always be after the basis of opinion – to help make clear (though it is also stated) that the EoM does not modify the opinion.