stockholders' equity occurring after year-end, but would not generally perform an investigation
of such items. Choice "d" is incorrect. Confirming bank accounts established after year-end is
generally not done (only those in existence at year-end are confirmed). Accounts established
after year-end generally would not be relevant to year-end amounts.
QUESTION: 134
What is an auditor's responsibility for supplementary information required by the GASB that is
placed outside the basic financial statements?

A. Label the information as unaudited and expand the auditor's report to include a disclaimer on
the information.
B. Add an explanatory paragraph to the auditor's report and refer to the information as "required
supplementary information."
C. Apply limited procedures to the information and report deficiencies in, or the omission of, the
information.
D. Audit the required supplementary information in accordance with generally accepted
governmental auditing standards.

Answer(s): C
Explanation:
Choice "c" is correct. With respect to supplementary information required by the GASB that is
placed outside the basic financial statements, the auditor should apply limited procedures to the
information (to determine that it is consistent with the basic audited financial statements) and
report deficiencies in or the omission of the information (via an explanatory paragraph). Choice
"a" is incorrect. If the information is labeled "unaudited," a disclaimer general y would not be
necessary. Choice "b" is incorrect. The explanatory paragraph is only added if the supplemental
information required by the GASB is deficient, omitted entirely, if the auditor cannot complete
procedures, or if there is doubt about conformity with guidelines. Choice "d" is incorrect. The
supplementary information required by the GASB is not required to be audited since it is placed
outside of the basic financial statements; however, an opinion is permitted.
QUESTION: 135
An auditor's responsibility to express an opinion on the financial statements is:

A. Implicitly represented in the auditor's standard report.
B. Explicitly represented in the opening paragraph of the auditor's standard report.
C. Explicitly represented in the scope paragraph of the auditor's standard report.
D. Explicitly represented in the opinion paragraph of the auditor's standard report.

Answer(s): B
Explanation:
Choice "b" is correct. The auditor's responsibility to express an opinion on the FS is explicitly
represented in the last sentence of the opening paragraph: "Our responsibility is to express an
opinion on these financial statements based on our audit."
Choice "a" is incorrect. The responsibility to express an opinion is explicitly represented (i.e.,
clearly stated), not implicitly represented (i.e., assumed).
Choice "c" is incorrect. There are no words in the scope paragraph that represent an auditor's
responsibility to express an opinion.
Choice "d" is incorrect. The opinion paragraph includes the auditor's opinion, but does not

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