[qwerty113]

Multiple Choice

Question 9 of 90 REPT-0029

Thomas, CPA, has examined the consolidated financial statements of Kass Corporation. Jones, CPA, has examined the financial statements of the sole subsidiary which is material in relation to the total examined by Thomas. It would be appropriate for Thomas to serve as the principal auditor, but it is impractical for Thomas to review the work of Jones. Assuming an unqualified opinion is expressed by Jones, one would expect Thomas to

a. Express an unqualified opinion on the consolidated financial statements and refer to the work of Jones.

b. Express a qualified opinion on the consolidated financial statements and refer to the work of Jones.

c. Express an unqualified opinion on the consolidated financial statements and not refer to the work of Jones.

d. Refuse to express an opinion on the consolidated financial statements.

Thanks in advance.

[rjcpa]

I think A. Since he can't review the work of the Jones he sould not take responsibility for it. If he doesn't take responsibility he sould refer to the work done by Jones in the intro,scope, and opinion para.

FAR - 10/3/12 - 86
BEC - 11/27/12 - 70 1/14/13 - 81
AUD - 4/4/13 - 87
REG - 7/8/13 - 80

[K_Sunshine5]

I'm 98% sure that the answer is A. Thomas should site that they are sharing responsibility with Jones since Jones examined the subsidiary. Thomas does that by modifying the intro, scope, and opinion paragraphs to say “we”, meaning Thomas and Jones. In the intro paragraph, Thomas should reference Jones as “another auditor” (not say the actual name of the auditor) and state the percentages of assets and revenue or profit when compared to the parent company.

Hope this helps!

FAR: 65, 77!
AUD: 72, 72, 80!
REG: 64, 84!
BEC: 83!
Ethics: 98!

Delaware CPA as of May 23, 2014 at 10:43am EST.

"She believed she could, so she did."

[jamesb]

Answer A.

Whenever Auditor is unable to review the work of another CPA, he should refer to the other CPA.

I dont remember reading anywhere that Another CPA work will result in any other opinion then Unqualified.

AUD: TBA-
FAR Done
BEC Done

Becker
NINJA for AUD

[Author]

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