Exam 17: Completing the audit

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

Which one of the following is NOT one of the three main reasons why it is essential that working papers be thoroughly reviewed by another member of the audit firm at the completion of the audit?

If, after the accumulation of final evidence and during the evaluation of results, the auditor concludes that sufficient evidence has NOT been obtained to draw a conclusion about fairness of the client's representations, there are several choices:

What is the purpose of a management representation letter?

To ensure that the audit meets the public accounting firm's standard of performance:

Often, procedures for presentation- and disclosure-related objectives are integrated with the auditor's tests for:

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

The issuance of debentures by the client subsequent to year-end would require a footnote disclosure in, but no adjustments to, the financial statements under audit.

Completing the audit is which phase of the audit?

ASA 720 requires the auditor to read other information in documents containing audited financial reports that pertains directly to the financial report and to compare that information to make sure that it corresponds.If there is a material inconsistency, the client should be requested to change the information.If the client refuses, the auditor should:

'An agreement which commits the firm to a set of fixed conditions in the future regardless of what happens to profits or the economy as a whole' is a definition of a:

What is the purpose of a management letter?

A management representation letter is a written statement from a non-independent source and therefore:

Inquiries of management (orally and in writing)regarding the possibility of unrecorded contingencies will NOT be useful in uncovering:

Your client's balance sheet date is 30 June 2012, the audit report date is 31 August 2012, and the financial statements are issued 15 September 2012.A customer with a material outstanding accounts receivable balance declared bankruptcy on 5 July 2012 due to a warehouse fire that occurred 27 June 2012.State whether this situation warrants an adjustment to the financial statements, requires disclosure in footnotes but not an adjustment, or needs no action.Justify your answer.

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 the second category?

State the three conditions required for a contingent liability to exist.

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

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

Which one of the following is a required condition for a contingent liability to exist?