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CA Final Auditor's Report — practice questions

Explore 100 free Auditor's Report questions in CA Final Auditing. Open each question or exercise to read its content, reference answers and available explanation.

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Auditor's Report questions and exercises with answers

Showing questions 1–30 of 100.

Under the going concern assumption, an entity is viewed as one that will:Read the answer and worked solution →With liquidation imminent, statements are prepared on which basis?Read the answer and worked solution →The foreseeable future for going concern purposes is usually regarded as at least the next:Read the answer and worked solution →Repeated loan defaults and suppliers refusing credit most suggest:Read the answer and worked solution →How does the value of a going concern compare with its breakup value?Read the answer and worked solution →On going concern, what must an auditor conclude under ISA?Read the answer and worked solution →The auditor evaluates going concern for a period not less than how long after the balance sheet date?Read the answer and worked solution →Under ISA, where does an emphasis of matter paragraph sit?Read the answer and worked solution →An auditor adds an emphasis of matter paragraph about a well-disclosed litigation. The opinion is:Read the answer and worked solution →Which International Standard on Auditing covers emphasis of matter paragraphs?Read the answer and worked solution →Which situation needs a modified opinion, not just emphasis of matter?Read the answer and worked solution →A qualified opinion fits when a misstatement is material but:Read the answer and worked solution →Which failure is a typical ground for an adverse opinion?Read the answer and worked solution →A retailer wrongly computed depreciation on its building; the error is material but all else is fair. The opinion is:Read the answer and worked solution →A disclaimer of opinion is issued when the auditor:Read the answer and worked solution →Which sentence appears in the opinion paragraph of a disclaimer?Read the answer and worked solution →In a disclaimer, the wording "We have audited" changes to:Read the answer and worked solution →Which phrase marks the opinion paragraph of a qualified report?Read the answer and worked solution →Another common name for an unqualified opinion is:Read the answer and worked solution →An unqualified opinion gives what level of assurance on the statements?Read the answer and worked solution →If the auditor doubts the auditee's continuity, the report should include:Read the answer and worked solution →If the auditee is a going concern, the auditor's report is:Read the answer and worked solution →Why are some auditors reluctant to flag going concern doubt?Read the answer and worked solution →A company dismisses its auditor just before a modified opinion, then hires a friendlier one. This is called:Read the answer and worked solution →Distribution of an auditor's report may be restricted, for example for:Read the answer and worked solution →Does an emphasis of matter on going concern show an entity is near insolvency?Read the answer and worked solution →A going concern doubt can have what effect on bank loans?Read the answer and worked solution →Audit reports are valued mainly because they increase:Read the answer and worked solution →An auditor's report on financial statements is best described as:Read the answer and worked solution →How many common types of auditor's reports are described?Read the answer and worked solution →

Worked practice questions

Under the going concern assumption, an entity is viewed as one that will:

  1. Continue in business for the near future
  2. Be liquidated within the coming year
  3. Be sold to its largest creditor
  4. Stop trading after the audit report
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Correct answer: A. Continue in business for the near future

The assumption treats the entity as continuing operations with no intention or need to liquidate or cease trading.

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With liquidation imminent, statements are prepared on which basis?

  1. Going concern basis
  2. Historical cost only
  3. Cash basis only
  4. Liquidation basis
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Correct answer: D. Liquidation basis

Once liquidation is imminent the presumption of continuity fails, so the liquidation basis replaces the going concern basis.

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The foreseeable future for going concern purposes is usually regarded as at least the next:

  1. Three months
  2. Six months
  3. Twelve months
  4. Five years
Show answer and solution

Correct answer: C. Twelve months

The foreseeable future is usually taken as at least twelve months or the specified accounting period, whichever is longer.

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More Auditing topics

Overview of Audit of Public Sector UndertakingsInternal AuditStandards on Auditing and Professional EthicsInternational Ethics Standards Board for AccountantsRisk Assessment and Internal ControlSpecial Features of Audit of Banks and Non-Banking Financial CompaniesAuditor's Report on Financial StatementsAudit Planning Strategy and Execution