[Jasper]

I seem to be encountering situations where the Wiley Test Bank seems to have erroneous answers for the MCQ’s.

For instance, below are two MCQ’s that I think Wiley is wrong.

When a predecessor auditor reissues the report on the prior period’s financial statements at the request of the former client, the predecessor auditor should:

I chose: Obtain an updated management representation letter and compare it to that obtain during the prior period. Wiley marked this wrong.

I am fairly sure that this is one of the documents a predecessor auditor should obtain when reissuing a report on the prior period’s financial statement.

Another Wiley question:

Which of the following types of audit opinion(s) are appropriate when circumstances result in a scope limitation in relation to an audit of a public company’s internal control?

I picked that a qualified opinion is not appropriate and Wiley marked it wrong. I am under the impression that the only opinion that is appropriate is a disclaimer of opinion in this situation.

Maybe I am wrong, but after researching the Wiley AUD practice book, my answers seem right..

FAR 82
BEC 82
AUD 93
REG 87

[Anonymous]

What are the other choices for these questions? I haven't seen the second question yet, but I know I've seen the first one and my answer is not the same as your answer.

[Anonymous]

What are the other choices for these questions? I haven't seen the second question yet, but I know I've seen the first one and my answer is not the same as your answer.

[Anonymous]

Yeah, if you tell us what they said was the right choice, that will help…cause the big deal with AUD is that it's not about the “right” answer, but about the “best” answer. So with just one answer option, it's hard for us to know what to tell you! I think I went through all the MCQs in WTB for AUD and ended up concluding that they were right on all of them, but AUD has all sorts of confusing stuff that seems wrong at first. I argued with WTB more through this one than through the others that I've taken to date. 😉

[Anonymous]

Yeah, if you tell us what they said was the right choice, that will help…cause the big deal with AUD is that it's not about the “right” answer, but about the “best” answer. So with just one answer option, it's hard for us to know what to tell you! I think I went through all the MCQs in WTB for AUD and ended up concluding that they were right on all of them, but AUD has all sorts of confusing stuff that seems wrong at first. I argued with WTB more through this one than through the others that I've taken to date. 😉

[Jasper]

@ clarissa and Lilla,

The right answer to the first question is:

Compare the prior period's financial statements that the predecessor reported on with the financial statements to be presented for comparative purposes

The right answer to second question is:

Qualified: Yes; Adverse: No

So why is the answer in the first question better than the answer I picked?

FAR 82
BEC 82
AUD 93
REG 87

[Jasper]

@ clarissa and Lilla,

The right answer to the first question is:

Compare the prior period's financial statements that the predecessor reported on with the financial statements to be presented for comparative purposes

The right answer to second question is:

Qualified: Yes; Adverse: No

So why is the answer in the first question better than the answer I picked?

FAR 82
BEC 82
AUD 93
REG 87

[Anonymous]

The reason for the correct answer vs your answer for the first question is because the auditor needs to compare the current financial statements being audited by the successor auditor with the financial statements they audited before in order to reissue their report. The question states nothing about changing their opinion on the report, they are just reissuing their report from the prior period, hence the reason for not having a new mgmt representation letter. And when a predecessor auditor reissues their report, they need to look at the current financial statements for comparative purposes from the statements they audited. If they were changing their opinion on the financial statements or reporting that a material existence no longer exists, then they would need a new mgmt representation letter, but they are only reissuing their report. I hope this helps.

[Anonymous]

The reason for the correct answer vs your answer for the first question is because the auditor needs to compare the current financial statements being audited by the successor auditor with the financial statements they audited before in order to reissue their report. The question states nothing about changing their opinion on the report, they are just reissuing their report from the prior period, hence the reason for not having a new mgmt representation letter. And when a predecessor auditor reissues their report, they need to look at the current financial statements for comparative purposes from the statements they audited. If they were changing their opinion on the financial statements or reporting that a material existence no longer exists, then they would need a new mgmt representation letter, but they are only reissuing their report. I hope this helps.

[barelystayingsane]

For the second question, a scope limitation can result in either a qualified opinion or a disclaimer. It all depends on the materiality and pervasiveness of the scope limitation.

[barelystayingsane]

For the second question, a scope limitation can result in either a qualified opinion or a disclaimer. It all depends on the materiality and pervasiveness of the scope limitation.

[Jasper]

@ barelystayingsane,

So an auditor can issue a qualified opinion on a scope limitation in relation to an audit of a public company's internal control?

Maybe, I missing something here but I thought that only a disclaimer could be issued for a scope limitation in relation of a public company's internal control. When considering an audit of a public company's internal control, one would issue an adverse opinion for a material weakness and a disclaimer for scope limitation.

FAR 82
BEC 82
AUD 93
REG 87

[Jasper]

@ barelystayingsane,

So an auditor can issue a qualified opinion on a scope limitation in relation to an audit of a public company's internal control?

Maybe, I missing something here but I thought that only a disclaimer could be issued for a scope limitation in relation of a public company's internal control. When considering an audit of a public company's internal control, one would issue an adverse opinion for a material weakness and a disclaimer for scope limitation.

FAR 82
BEC 82
AUD 93
REG 87

[barelystayingsane]

See below

[barelystayingsane]

See below

[barelystayingsane]

It seems that the auditor can issue a qualified opinion based on a scope limitation as long as it's not imposed by management.

From PCAOB AS #2: 178. Scope Limitations. The auditor can express an unqualified opinion on management's assessment of internal control over financial reporting and an unqualified opinion on the effectiveness of internal control over financial reporting only if the auditor has been able to apply all the procedures necessary in the circumstances. If there are restrictions on the scope of the engagement imposed by the circumstances, the auditor should withdraw from the engagement, disclaim an opinion, or express a qualified opinion. The auditor's decision depends on his or her assessment of the importance of the omitted procedure(s) to his or her ability to form an opinion on management's assessment of internal control over financial reporting and an opinion on the effectiveness of the company's internal control over financial reporting. However, when the restrictions are imposed by management, the auditor should withdraw from the engagement or disclaim an opinion on management's assessment of internal control over financial reporting and the effectiveness of internal control over financial reporting.

[Author]

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