Chapter 6 acca f8 audit opinion mcqs

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ACCA AA Chapter 6: Audit Opinions - Unmodified/Modified

- Practice Exam (50 Questions)

Part 1: Questions

1 The financial statements of ABC Co are prepared on the going concern basis, but the auditor believes there is no realistic chance of survival beyond a few months The notes refer to going concern matters, but the directors refuse to change the basis Which audi-tors report is appropriate?

A Unmodified opinion with a ’Material uncertainty related to going concern’ section

B Adverse opinion

C Disclaimer of opinion

D Qualified opinion

2 Which statement about the ’Other Matter’ paragraph in an auditors report is true?

A It highlights matters most significant to the audit

B It draws attention to appropriately disclosed matters in the financial statements

C It is an alternative name for an ’Emphasis of Matter’ paragraph

D It refers to conflicts between the directors report and financial statements

3 The auditor of ABC Co believes trade receivables are materially misstated due to irrecov-erable amounts, and the directors refuse to adjust What audit opinion should be issued?

A Unmodified opinion

B Adverse opinion on the basis of a material misstatement

C Qualified opinion on the basis of a material misstatement

D Qualified opinion on the basis of insufficient audit evidence

4 Managements use of the going concern basis is appropriate, and a material uncertainty

is adequately disclosed in the notes What auditors report should be issued?

A Qualified opinion due to insufficient evidence about going concern

B Adverse opinion

C Qualified opinion with a ’Material uncertainty relating to going concern’ section

D Unmodified opinion with a ’Material uncertainty relating to going concern’ section

5 An ’Emphasis of Matter’ paragraph is best described as:

A Modifying the audit opinion

B Highlighting a significant matter without modifying the opinion

C Describing audit procedures

D Reporting insufficient evidence

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6 Managements use of the going concern basis is appropriate, but a material uncertainty is

NOTadequately disclosed What auditors report should be issued?

A Qualified opinion due to insufficient audit evidence

B Qualified opinion due to material misstatement

C Adverse opinion

D Unmodified opinion with a ’Material uncertainty relating to going concern’ section

7 A $5,000 depreciation error is found, but directors refuse to adjust Non-current assets are $1 million, and draft profit is $150,000 What is the most appropriate audit opinion?

A Unmodified with an emphasis of matter paragraph

B Qualified opinion due to insufficient evidence

C Unmodified

D Qualified opinion due to a misstatement

8 Which of the following is NOT a form of audit opinion in an auditors report?

A Unmodified

B Disclaimer

C Emphasis of matter

D Qualified

9 A Key Audit Matters section is best described as:

A Modifying the audit opinion

B Highlighting significant risks or judgments in the audit

C Reporting insufficient evidence

D Describing managements responsibilities

10 An Other Matter paragraph is used to:

A Modify the audit opinion

B Communicate matters not required to be disclosed in the financial statements

C Highlight material misstatements

D Describe audit procedures

11 An adverse opinion is issued when misstatements are:

A Material but not pervasive

B Material and pervasive

C Insignificant

D Undetected

12 A disclaimer of opinion is issued when:

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A Misstatements are material but not pervasive

B The auditor cannot obtain sufficient audit evidence

C The financial statements are free of errors

D A significant uncertainty is disclosed

13 An unmodified opinion indicates that the financial statements:

A Are completely free of errors

B Are free of material misstatement

C Guarantee future viability

D Are prepared by the auditor

14 A qualified opinion is issued when:

A Misstatements are material and pervasive

B Misstatements are material but not pervasive

C The auditor provides non-audit services

D The financial statements are free of errors

15 The Material uncertainty related to going concern section is included when:

A The going concern basis is inappropriate

B A material uncertainty exists and is adequately disclosed

D The auditor lacks sufficient evidence

16 An emphasis of matter paragraph is included to:

B Highlight a significant matter without modifying the opinion

C Report insufficient evidence

D List audit procedures

17 Which standard governs going concern assessments in audits?

A ISA 320

B ISA 570

C ISA 700

D ISA 701

18 If the auditor cannot obtain sufficient evidence about going concern, the opinion is:

A Unmodified

B Qualified or disclaimer

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C Adverse

D Unmodified with an emphasis of matter

19 The auditors report for a public interest entity must include:

A A detailed list of audit procedures

B Key audit matters

C Managements financial projections

D The auditors fee structure

20 A modified opinion is required when:

A The financial statements are free of errors

B There are material misstatements or insufficient evidence

C A significant uncertainty is disclosed

D The auditor provides non-audit services

21 The Basis for Opinion section in an unmodified report includes:

A A statement on auditor independence

B A list of material misstatements

C Managements responsibilities

D Audit procedures performed

22 An unmodified opinion with an emphasis of matter is issued when:

A A material misstatement exists

B A significant matter needs highlighting without modifying the opinion

C Insufficient evidence is obtained

D The going concern basis is inappropriate

23 If misstatements are material and pervasive, the auditor issues:

A A qualified opinion

B An adverse opinion

C A disclaimer of opinion

D An unmodified opinion

24 The auditors report must state that the audit provides:

A Absolute assurance

B Reasonable assurance

C Limited assurance

D No assurance

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25 A qualified opinion due to insufficient evidence is issued when:

A Misstatements are material and pervasive

26 The Other Matter paragraph is used to:

B Communicate matters outside the financial statements

D Describe key audit matters

27 If the going concern basis is inappropriate, the auditor issues:

A An unmodified opinion

C A disclaimer of opinion

D An emphasis of matter

28 Key audit matters are required for:

A All companies

B Public interest entities

C Small private companies

D Non-profit organizations

29 An emphasis of matter paragraph is included after:

A The Basis for Opinion section

B The Opinion section

C The Auditors Responsibilities section

D The Key Audit Matters section

B The auditor cannot form an opinion due to insufficient evidence

D A material uncertainty is disclosed

31 The auditors report is governed by:

A ISA 320

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B ISA 570

C ISA 700

D ISA 315

32 An adverse opinion is issued when:

B Misstatements are material and pervasive

C The auditor lacks sufficient evidence

33 The Material uncertainty related to going concern section is included when:

B A material uncertainty is adequately disclosed

D The auditor cannot obtain sufficient evidence

34 An unmodified opinion indicates:

A No errors exist

B No material misstatements exist

C The company will continue as a going concern

D The auditor prepared the financial statements

35 A qualified opinion is issued for:

A Material and pervasive misstatements

B Material but not pervasive misstatements

C No misstatements

D A significant uncertainty

36 The auditors report is addressed to:

A The board of directors

B The shareholders

C The audit committee

D The chief executive officer

37 An Emphasis of Matter paragraph is used when:

A The audit opinion is modified

B A significant matter needs highlighting

C The auditor lacks evidence

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38 Key audit matters are communicated to:

A Enhance user understanding of significant audit judgments

B Modify the audit opinion

C Describe all audit procedures

D Report material misstatements

39 If the auditor disagrees with managements accounting policies, they may issue:

B A qualified or adverse opinion

C An emphasis of matter

D A key audit matter

40 The Auditors Responsibilities section includes:

A A statement on obtaining reasonable assurance

B A list of all audit procedures

C Managements responsibilities

D Financial statement preparation

42 The Basis for Opinion section is included:

A Before the Opinion section

B After the Opinion section

C After the Key Audit Matters section

D Only in modified opinions

43 An unmodified opinion with a Material uncertainty related to going concern section is issued when:

B A material uncertainty is adequately disclosed

D The auditor lacks sufficient evidence

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44 A qualified opinion due to a material misstatement is issued when:

A The misstatement is pervasive

B The misstatement is material but not pervasive

C The auditor cannot obtain sufficient evidence

45 The Other Matter paragraph is included to:

B Communicate matters not disclosed in the financial statements

D Describe key audit matters

46 If the financial statements are prepared on an inappropriate basis, the auditor issues:

47 Key audit matters are governed by:

A ISA 320

B ISA 570

C ISA 700

D ISA 701

48 An emphasis of matter paragraph does NOT:

A Highlight a significant matter

B Modify the audit opinion

C Refer to disclosed matters in the financial statements

D Require auditor judgment

49 If a material uncertainty related to going concern is not disclosed, the auditor may issue:

B A qualified or adverse opinion

50 The auditors report must be signed by:

A The audit committee

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B The engagement partner

C The board of directors

D The chief executive officer

Part 2: Answers with Explanations

1 B

Explanation: Per ISA 570, if the going concern basis is inappropriate (e.g., no realistic

chance of survival) and the directors refuse to adjust the financial statements to a liqui-dation basis, this constitutes a material and pervasive misstatement, requiring an adverse opinion An unmodified opinion (A) or disclaimer (C) is inappropriate, as the issue is a misstatement, not a lack of evidence A qualified opinion (D) is insufficient for pervasive issues

2 D

Explanation: Per ISA 706, an Other Matter paragraph communicates matters not required

to be disclosed in the financial statements, such as conflicts between the directors report and financial statements It does not highlight significant audit matters (A, covered by key audit matters), refer to disclosed matters (B, covered by emphasis of matter), or serve

as an alternative to emphasis of matter (C)

3 C

Explanation: A material misstatement in trade receivables that is not pervasive warrants

a qualified opinion, per ISA 705, as the financial statements are materially misstated but not wholly unreliable An adverse opinion (B) is for pervasive misstatements, an unmodified opinion (A) is inappropriate, and insufficient evidence (D) does not apply here

4 D

Explanation: Per ISA 570, if the going concern basis is appropriate and a material

certainty is adequately disclosed, an unmodified opinion is issued with a Material un-certainty related to going concern section to highlight the issue A qualified opinion (A, C) or adverse opinion (B) is not required unless the basis is inappropriate or evidence is insufficient

5 B

Explanation: An emphasis of matter paragraph, per ISA 706, highlights a significant

matter (e.g., a disclosed uncertainty) without modifying the opinion It does not modify the opinion (A), describe procedures (C), or report insufficient evidence (D)

6 B

Explanation: Per ISA 570, if a material uncertainty exists but is not adequately disclosed,

this is a material misstatement If not pervasive, a qualified opinion is issued; if perva-sive, an adverse opinion may be considered Insufficient evidence (A) or an unmodified opinion (D) is inappropriate, as the issue is disclosure-related

7 C

Explanation: A $5,000 error in depreciation with non-current assets of $1 million and

profit of $150,000 is unlikely to be material (e.g., 3.3% of profit, below typical thresholds

of 510%) Thus, an unmodified opinion is appropriate, as the misstatement does not

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warrant a qualified opinion (D) or emphasis of matter (A) Insufficient evidence (B) does not apply

8 C

Explanation: Per ISA 705, audit opinions are unmodified, qualified, adverse, or

dis-claimer Emphasis of matter (C) is a paragraph to highlight matters, not a type of opinion

9 B

Explanation: Per ISA 701, key audit matters highlight significant risks or areas of

judg-ment in the audit, particularly for public interest entities They do not modify the opinion (A), report insufficient evidence (C), or describe responsibilities (D)

10 B

Explanation: An Other Matter paragraph, per ISA 706, communicates matters not

re-quired to be disclosed in the financial statements, such as regulatory issues It does not modify the opinion (A), highlight misstatements (C), or describe procedures (D)

11 B

Explanation: An adverse opinion is issued when misstatements are material and

per-vasive, per ISA 705 Material but not pervasive misstatements (A) lead to a qualified opinion, insignificant misstatements (C) do not affect the opinion, and undetected mis-statements (D) are not a basis for an opinion

12 B

Explanation: A disclaimer of opinion is issued when the auditor cannot obtain

suffi-cient audit evidence to form an opinion, per ISA 705 Material misstatements (A) lead to qualified or adverse opinions, error-free statements (C) lead to unmodified opinions, and disclosed uncertainties (D) may lead to an emphasis of matter

13 B

Explanation: An unmodified opinion indicates the financial statements are free of

mate-rial misstatement, per ISA 700 It does not guarantee no errors (A), future viability (C),

or auditor preparation (D)

14 B

Explanation: A qualified opinion is issued for material but not pervasive misstatements,

per ISA 705 Pervasive misstatements (A) lead to an adverse opinion, non-audit services (C) are unrelated, and error-free statements (D) lead to an unmodified opinion

15 B

Explanation: Per ISA 570, a Material uncertainty related to going concern section is

included when a material uncertainty exists and is adequately disclosed An inappropriate basis (A) leads to an adverse opinion, error-free statements (C) do not require it, and insufficient evidence (D) may lead to a disclaimer

16 B

Explanation: An emphasis of matter paragraph highlights a significant matter without

modifying the opinion, per ISA 706 It does not report insufficient evidence (C), list procedures (D), or modify the opinion (A)

17 B

Explanation: ISA 570 governs going concern assessments, including material

uncertain-ties and disclosure requirements ISA 320 (A) covers materiality, ISA 700 (C) covers the

Tiêu đề	Audit opinions
Chuyên ngành	Audit and assurance
Thể loại	Trắc nghiệm
Năm xuất bản	2025

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