Exam 15: Completing the Audit or Review

What happens to the sufficiency of audit evidence collected if, in the final review, new information causes the engagement partner to decide that a lower materiality threshold is required and, as a result, the partner reduces planning materiality for the audit?

AASB 137 Provisions, Contingent Liabilities and Contingent Assets requires the accrual and disclosure of remote contingent losses that can be reasonably estimated.

Which of the following procedures is not required of the reviewer?

Restatements are required when the auditor determines that a:

The purpose of partner rotation is to help assure auditor independence and to periodically provide a fresh approach to the audit.

Business failures result from a variety of causes, including:

During the audit of Tasman Oil NL, the engagement team discovers that Tasman has illegally buried 80 000 litres of sludge in the field behind its refinery. The auditors will assess Tasman's treatment of the illegality in the financial reports and related disclosures and possibly draw attention to it in the audit report.

The public accounting firm is not required to have policies and procedures in place for conducting an internal quality control review for each audit before issuing the audit opinion.

At the end of the audit, management and the auditor must decide which possible adjustments will be:

The partner responsible for performing an engagement quality review will review the working papers and financial report to perform all of the following except:

The audit documentation should include the following evidence on the performance of the engagement quality control review except for:

The going-concern evaluation is based on information obtained from:

The introduction of partner rotation was due to:

The Corporations Act 2001 defines a high quality audit as one that is performed in accordance with generally accepted accounting principles.

Investors and creditors do not become upset when a business fails, particularly when it happens shortly after the auditor has issued an unqualified opinion.

Which of the following is explicitly required by the auditing standards for audits of public companies?

Contingencies are considered by the auditor in relation to the AASB 137 criteria to determine whether material contingencies exist with the client and, if so, that they are properly accrued or disclosed.

The audit documentation should include evidence on the performance on the engagement quality control review.

Which one of the following items would be most likely considered a contingent liability for Foodchain Ltd, a supermarket chain?

The engagement quality control review is: