B. Disclaimer of responsibility concerning the portion of the financial statements examined by
the other auditor.
C. Name of the other auditor.
D. Division of responsibility.

Answer(s): D
Explanation:
Choice "d" is correct. Reference to the division of responsibility should be made in the
introductory, scope and opinion paragraphs of the principal auditor's report.
Choice "a" is incorrect. The magnitude of the portion of the FS examined by the other auditor
appears only in the introductory paragraph.
Choice "b" is incorrect. The principal auditor is not disclaiming responsibility, just dividing it.
Choice "c" is incorrect. The name of the other auditor is generally not mentioned, but may be
mentioned with permission and if the other auditor's report is also presented. (Watch out for
exclusive words such as "always" or "never.")
QUESTION: 159
Information accompanying the basic financial statements in an auditor-submitted document
should not include:

A. An analysis of inventory by location.
B. A statement that the al owance for doubtful accounts is adequate.
C. A statement that the depreciable life of a new asset is 20 years.
D. An analysis of revenue by product line.

Answer(s): B
Explanation:
Choice "b" is correct. A statement that the "allowance for doubtful accounts is adequate" is
generally not included in information accompanying the basic FS in an auditor-submitted
document (ASD) because it expresses an opinion rather than providing details or explanations.
Choices "a", "c", and "d" are incorrect, because the following information, which contains
additional details or explanations, may accompany the basic FS in an ASD:

A. An analysis of inventory by location.
C. Depreciable lives of assets.
D. An analysis of revenue by product line.
QUESTION: 160
For a particular entity's financial statements to be presented fairly in conformity with generally
accepted accounting principles, it is not required that the principles selected:

A. Be appropriate in the circumstances for the particular entity.
B. Reflect transactions in a manner that presents the financial statements within a range of
acceptable limits.
C. Present information in the financial statements that is classified and summarized in a
reasonable manner.
D. Be applied on a basis consistent with those followed in the prior year.

Answer(s): D

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