Question 1

Footnote disclosure in the financial statement is necessary if the contingent liability is:

Accepted Answer

A)  Remote. 
B)  Probable. 
C)  Reasonably possible. 
D)  Has occurred. 
A)  Remote. 
B)  Probable. 
C)  Reasonably possible. 
D)  Has occurred.

Question 2

Why are the working papers reviewed by another member of the audit firm at the completion of the audit?

Accepted Answer

There are three main reasons for working

Question 3

If the auditor concludes that it is highly improbable that the client will continue as a going concern, the auditor should, in accordance with ASA 700:

Accepted Answer

A)  issue a disclaimer of opinion. 
B)  include an emphasis of matter section in the audit report. 
C)  issue an unqualified report but explain the concerns in the opinion paragraph. 
D)  express an adverse opinion. 
A)  issue a disclaimer of opinion. 
B)  include an emphasis of matter section in the audit report. 
C)  issue an unqualified report but explain the concerns in the opinion paragraph. 
D)  express an adverse opinion.

Question 4

Discuss the purposes of performing analytical procedures during the audit completion phase.

Accepted Answer

Analytical procedures performed during t

Question 5

The subsequent discovery of facts requiring the recall or reissuance of financial statements from developments occurring after the date of the auditor's report.

Accepted Answer

A)  will not arise 
B)  will certainly arise 
C)  will probably arise 
D)  will probably not arise 
A)  will not arise 
B)  will certainly arise 
C)  will probably arise 
D)  will probably not arise

Question 6

Identify and describe the four presentation and disclosure objectives.

Accepted Answer

1. Occurrence and rights and obligations

Question 7

Which one of the following is NOT a presentation and disclosure objective?

Accepted Answer

A)  Classification 
B)  Completeness 
C)  Rights and obligations 
D)  Cutoff 
A)  Classification 
B)  Completeness 
C)  Rights and obligations 
D)  Cutoff

Question 8

Auditors approach obtaining evidence for presentation and disclosure objectives differently from how they approach obtaining evidence for transaction- related and balance- related objectives.

Accepted Answer

A) True 
 B)False

Question 9

An auditor's decision concerning whether or not to 'dual date' the audit report is based upon the auditor's willingness to:

Accepted Answer

A)  permit inclusion of a footnote captioned: event (unaudited) subsequent to the date of the auditor's report. 
B)  extend auditing procedures. 
C)  accept responsibility for subsequent events. 
D)  assume responsibility for events subsequent to the issuance of the auditor's report. 
A)  permit inclusion of a footnote captioned: event (unaudited) subsequent to the date of the auditor's report. 
B)  extend auditing procedures. 
C)  accept responsibility for subsequent events. 
D)  assume responsibility for events subsequent to the issuance of the auditor's report.

Question 10

What are the five main aspects of the overall evaluation of results at the completion of the audit?

Accepted Answer

· Evaluate the sufficiency of evidence.

Question 11

Besides the search for contingent liabilities and the review for subsequent events, the auditor has four important final evidence accumulation responsibilities, all of which are required by current auditing standards. Discuss each of these four responsibilities.

Accepted Answer

· Final analytical procedures performed

Question 12

A specific letter of inquiry to the client's external legal counsel would include:

Accepted Answer

A)  a list of litigation and claims. 
B)  a request from the client's external legal counsel confirming the reasonableness of management's assessment of the outcome of each identified litigation. 
C)  management's assessment of the outcome of each identified litigation. 
D)  all of the above 
A)  a list of litigation and claims. 
B)  a request from the client's external legal counsel confirming the reasonableness of management's assessment of the outcome of each identified litigation. 
C)  management's assessment of the outcome of each identified litigation. 
D)  all of the above

Question 13

If the response from the client's legal representative contains a disagreement with management, the auditor should:

Accepted Answer

A)  issue a qualified audit report. 
B)  seek resolution through discussion with management and the lawyer. 
C)  confirm the information using alternative audit procedures. 
D)  seek resolution with management. 
A)  issue a qualified audit report. 
B)  seek resolution through discussion with management and the lawyer. 
C)  confirm the information using alternative audit procedures. 
D)  seek resolution with management.

Question 14

The audit procedures for the subsequent events review can be divided into two categories: (1) procedures normally integrated as a part of the verification of year- end account balances and (2) those performed specifically for the purpose of discovering subsequent events. Which of the following procedures is in category 1?

Accepted Answer

A)  Review journals and ledgers of year 2 to determine the existence of any transaction related to year 1. 
B)  Obtain a management representation letter written by client. 
C)  Inquire of client regarding contingent liabilities. 
D)  Examine subsequent period sales and purchases transactions to determine whether the cutoff is accurate. 
A)  Review journals and ledgers of year 2 to determine the existence of any transaction related to year 1. 
B)  Obtain a management representation letter written by client. 
C)  Inquire of client regarding contingent liabilities. 
D)  Examine subsequent period sales and purchases transactions to determine whether the cutoff is accurate.

Question 15

Which of the following is NOT required to be communicated to the audit committee or similarly designed body under ASA 260?

Accepted Answer

A)  All material irregularities and illegal acts of a material nature 
B)  Disagreements with management about the scope of the audit, applicability of accounting principles or wording of the audit report 
C)  Difficulties encountered in performing the audit such as lack of availability of client personnel and failure to provide necessary information 
D)  Auditor's responsibilities under generally accepted auditing standards, including responsibility for evaluating internal control and the concept of reasonable rather than absolute assurance 
A)  All material irregularities and illegal acts of a material nature 
B)  Disagreements with management about the scope of the audit, applicability of accounting principles or wording of the audit report 
C)  Difficulties encountered in performing the audit such as lack of availability of client personnel and failure to provide necessary information 
D)  Auditor's responsibilities under generally accepted auditing standards, including responsibility for evaluating internal control and the concept of reasonable rather than absolute assurance

Question 16

A letter from the client's external legal counsel requesting information about any litigations or claims of which the lawyer is aware appears in the:

Accepted Answer

A)  letter of inquiry. 
B)  letters testamentary. 
C)  lawyer's representation letter. 
D)  management representation letter. 
A)  letter of inquiry. 
B)  letters testamentary. 
C)  lawyer's representation letter. 
D)  management representation letter.

Question 17

Which one of the following auditing procedures is ordinarily performed last?

Accepted Answer

A)  Testing of the purchasing function 
B)  Reading of the minutes of the directors' meetings 
C)  Confirming accounts payable 
D)  Obtaining a management representation letter 
A)  Testing of the purchasing function 
B)  Reading of the minutes of the directors' meetings 
C)  Confirming accounts payable 
D)  Obtaining a management representation letter

Question 18

State the two primary types of subsequent events that require consideration by management and evaluation by the auditor, and give two examples of each type.

Accepted Answer

· Events that have a direct effect on th

Question 19

Management furnishes the independent auditor with information concerning litigation, claims and assessments. Which of the following is the auditor's primary means of initiating action to corroborate such information?

Accepted Answer

A)  Request that client management engage outside legal counsel to suggest wording for the text of a footnote explaining the nature and probable outcome of existing litigation, claims and assessments. 
B)  Request that client management send a letter of general inquiry to those lawyers with whom management consulted concerning litigation, claims and assessments. 
C)  Request that client lawyers undertake a reconsideration of matters of litigation, claims and assessments with which they were consulted during the period under examination. 
D)  Request that client lawyers provide a legal opinion concerning the policies and procedures adopted by management to identify, evaluate and account for litigation, claims and assessments. 
A)  Request that client management engage outside legal counsel to suggest wording for the text of a footnote explaining the nature and probable outcome of existing litigation, claims and assessments. 
B)  Request that client management send a letter of general inquiry to those lawyers with whom management consulted concerning litigation, claims and assessments. 
C)  Request that client lawyers undertake a reconsideration of matters of litigation, claims and assessments with which they were consulted during the period under examination. 
D)  Request that client lawyers provide a legal opinion concerning the policies and procedures adopted by management to identify, evaluate and account for litigation, claims and assessments.

Question 20

The following events all occurred after the balance sheet date of 30 June 2012, but prior to the date of the audit report, 15 August 2012. Which one would NOT require an adjustment to the account balances as at 30 June 2012?

Accepted Answer

A)  Investments recorded at cost ($100 000) were sold on 2 July 2012 for $60 000. 
B)  A customer declared bankruptcy on 31 July 2012. 
C)  A contingent liability disclosed in the notes at an estimated amount of $100 000 was settled out of court on 15 July 2012 for $125 000. 
D)  Uninsured inventory valued at $100 000 on 30 June 2012 was destroyed in a fire on 5 July 2012. 
A)  Investments recorded at cost ($100 000) were sold on 2 July 2012 for $60 000. 
B)  A customer declared bankruptcy on 31 July 2012. 
C)  A contingent liability disclosed in the notes at an estimated amount of $100 000 was settled out of court on 15 July 2012 for $125 000. 
D)  Uninsured inventory valued at $100 000 on 30 June 2012 was destroyed in a fire on 5 July 2012.

Footnote disclosure in the financial statement is necessary if the contingent liability is:

Why are the working papers reviewed by another member of the audit firm at the completion of the audit?

If the auditor concludes that it is highly improbable that the client will continue as a going concern, the auditor should, in accordance with ASA 700:

Discuss the purposes of performing analytical procedures during the audit completion phase.

The subsequent discovery of facts requiring the recall or reissuance of financial statements from developments occurring after the date of the auditor's report.

Identify and describe the four presentation and disclosure objectives.

Which one of the following is NOT a presentation and disclosure objective?

Auditors approach obtaining evidence for presentation and disclosure objectives differently from how they approach obtaining evidence for transaction- related and balance- related objectives.

An auditor's decision concerning whether or not to 'dual date' the audit report is based upon the auditor's willingness to:

What are the five main aspects of the overall evaluation of results at the completion of the audit?

Besides the search for contingent liabilities and the review for subsequent events, the auditor has four important final evidence accumulation responsibilities, all of which are required by current auditing standards. Discuss each of these four responsibilities.

A specific letter of inquiry to the client's external legal counsel would include:

If the response from the client's legal representative contains a disagreement with management, the auditor should:

Which of the following is NOT required to be communicated to the audit committee or similarly designed body under ASA 260?

A letter from the client's external legal counsel requesting information about any litigations or claims of which the lawyer is aware appears in the:

Which one of the following auditing procedures is ordinarily performed last?

State the two primary types of subsequent events that require consideration by management and evaluation by the auditor, and give two examples of each type.

Management furnishes the independent auditor with information concerning litigation, claims and assessments. Which of the following is the auditor's primary means of initiating action to corroborate such information?

The following events all occurred after the balance sheet date of 30 June 2012, but prior to the date of the audit report, 15 August 2012. Which one would NOT require an adjustment to the account balances as at 30 June 2012?

Demand for Audit and Assurance Services

Auditors Legal Environment

Audit Quality and Ethics

Audit Responsibilities and Objectives

Audit Evidence

Audit Planning and Documentation

Materiality and Risk

Internal Control and Control Risk

Fraud Auditing

The Impact of Information Technology on the Audit Process

Overall Audit Plan and Audit Program

Audit of the Sales and Collection Cycle: Tests of Controls and Substantive Tests of Transactions

Completing Tests in the Sales and Collection Cycle: Accounts Receivable

Audit Sampling

Audit of Transaction Cycles and Financial Statement Balances I

Audit of Transaction Cycles and Financial Statement Balances II

Audit Reporting

Other Auditing and Assurance Engagements

Filters

Exam 17: Completing the Audit

Footnote disclosure in the financial statement is necessary if the contingent liability is:

Why are the working papers reviewed by another member of the audit firm at the completion of the audit?

If the auditor concludes that it is highly improbable that the client will continue as a going concern, the auditor should, in accordance with ASA 700:

Discuss the purposes of performing analytical procedures during the audit completion phase.

The subsequent discovery of facts requiring the recall or reissuance of financial statements from developments occurring after the date of the auditor's report.

Identify and describe the four presentation and disclosure objectives.

Which one of the following is NOT a presentation and disclosure objective?

Auditors approach obtaining evidence for presentation and disclosure objectives differently from how they approach obtaining evidence for transaction- related and balance- related objectives.

An auditor's decision concerning whether or not to 'dual date' the audit report is based upon the auditor's willingness to:

What are the five main aspects of the overall evaluation of results at the completion of the audit?

Besides the search for contingent liabilities and the review for subsequent events, the auditor has four important final evidence accumulation responsibilities, all of which are required by current auditing standards. Discuss each of these four responsibilities.

A specific letter of inquiry to the client's external legal counsel would include:

If the response from the client's legal representative contains a disagreement with management, the auditor should:

Which of the following is NOT required to be communicated to the audit committee or similarly designed body under ASA 260?

A letter from the client's external legal counsel requesting information about any litigations or claims of which the lawyer is aware appears in the:

Which one of the following auditing procedures is ordinarily performed last?

State the two primary types of subsequent events that require consideration by management and evaluation by the auditor, and give two examples of each type.

Management furnishes the independent auditor with information concerning litigation, claims and assessments. Which of the following is the auditor's primary means of initiating action to corroborate such information?

The following events all occurred after the balance sheet date of 30 June 2012, but prior to the date of the audit report, 15 August 2012. Which one would NOT require an adjustment to the account balances as at 30 June 2012?

Demand for Audit and Assurance Services

Auditors Legal Environment

Audit Quality and Ethics

Audit Responsibilities and Objectives

Audit Evidence

Audit Planning and Documentation

Materiality and Risk

Internal Control and Control Risk

Fraud Auditing

The Impact of Information Technology on the Audit Process

Overall Audit Plan and Audit Program

Audit of the Sales and Collection Cycle: Tests of Controls and Substantive Tests of Transactions

Completing Tests in the Sales and Collection Cycle: Accounts Receivable

Audit Sampling

Audit of Transaction Cycles and Financial Statement Balances I

Audit of Transaction Cycles and Financial Statement Balances II

Audit Reporting

Other Auditing and Assurance Engagements

Filters