Exam 16: Auditing Operations and Completing the Audit

With respect to issuance of an audit report which is dual-dated for a subsequent event occurring after the completion of fieldwork but before issuance of the auditors' report,the auditors' responsibility for events occurring subsequent to the date of the audit report is:

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(Multiple Choice)

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Question 1

Correct Answer:

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Which of the following procedures would an auditor most likely perform to obtain evidence about the occurrence of subsequent events?

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(Multiple Choice)

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Question 2

Correct Answer:

Verified

Auditors must be concerned with events that occur subsequent to the balance sheet date,because the events may need to be reflected in the financial statements. a.Describe the two general types of subsequent events. b.What is the auditors' responsibility with respect to detecting subsequent events? c.List three audit procedures that are used by the auditors to search for subsequent events.

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(Essay)

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Question 3

Correct Answer:

Verified

a.The two types of subsequent events are:
Type 1-events that provide additional evidence about conditions that existed at the balance sheet date and affect the estimates included in the statements.
Type 2-events that provide evidence about conditions that arose subsequent to the balance sheet date and require disclosure in the financial statements.
b.Auditors have a responsibility to search for material subsequent events to the date of the auditors' report.
c.Procedures that are used to search for subsequent events include (only three required):
-Review interim financial statements.
-Review minutes of directors' and stockholders' meetings.
-Make inquiries of officers.
-Obtain a letter from the client's attorney.
-Obtain a letter of representations from management

Which of the following is not correct relating to representation letters?

(Multiple Choice)

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Question 4

Which of the following is an analytical procedure that should be applied to the income statement?

(Multiple Choice)

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Question 5

An auditor will ordinarily examine invoices from lawyers primarily in order to:

(Multiple Choice)

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Question 6

An approach that quantifies the total likely misstatement as of the current year-end based on the effects of reflecting all misstatements existing in the balance sheet at the end of the current year including those that occurred in prior years is referred to as:

(Multiple Choice)

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Question 7

On February 9,Brown,CPA,expressed an unmodified (unqualified)opinion on the financial statements of Web Co.On October 9,during a peer review of Brown's practice,the reviewer informed Brown that engagement personnel failed to perform a search for subsequent events for the Web engagement.Brown should first:

(Multiple Choice)

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Question 8

To which of the following matters would materiality limits not apply when obtaining written client representations?

(Multiple Choice)

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Question 9

General risk contingencies are required to be disclosed in the financial statements.

(True/False)

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Question 10

The Miscellaneous Revenue account should only be analyzed if it is material in amount.

(True/False)

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Question 11

Which of the following material events occurring subsequent to the balance sheet date would require an adjustment to the financial statements before they could be issued?

(Multiple Choice)

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Question 12

Which of the following is not a procedure that is designed to provide evidence about the existence of loss contingencies?

(Multiple Choice)

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Question 13

It would be appropriate for the payroll accounting department to be responsible for which of the following functions?

(Multiple Choice)

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Question 14

If management refuses to furnish certain written representations that the auditor believes are essential,which of the following is appropriate?

(Multiple Choice)

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Question 15

The review of audit working papers by the audit partner is normally completed:

(Multiple Choice)

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Question 16

The auditors used statistical sampling for the audit of inventory and calculated an estimated total audited value of $1,100,000;the client's book value for inventory is $1,200,000.This misstatement is properly classified as a:

(Multiple Choice)

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Question 17

Which of the following is not a procedure that auditors typically perform to search for significant events during the period after year-end but prior to the audit report date?

(Multiple Choice)

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Question 18

An attorney responding to an auditor as a result of the client's letter of audit inquiry may appropriately limit the response to:

(Multiple Choice)

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Question 19

An auditor believes that a client's warranty liability is between $100,000 and $130,000,with each amount in that interval equally likely.The financial statements show a liability of $90,000.

(Multiple Choice)

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Question 20

Showing 1 - 20 of 83

With respect to issuance of an audit report which is dual-dated for a subsequent event occurring after the completion of fieldwork but before issuance of the auditors' report,the auditors' responsibility for events occurring subsequent to the date of the audit report is:

Which of the following procedures would an auditor most likely perform to obtain evidence about the occurrence of subsequent events?

Which of the following is not correct relating to representation letters?

Which of the following is an analytical procedure that should be applied to the income statement?

An auditor will ordinarily examine invoices from lawyers primarily in order to:

An approach that quantifies the total likely misstatement as of the current year-end based on the effects of reflecting all misstatements existing in the balance sheet at the end of the current year including those that occurred in prior years is referred to as:

To which of the following matters would materiality limits not apply when obtaining written client representations?

General risk contingencies are required to be disclosed in the financial statements.

The Miscellaneous Revenue account should only be analyzed if it is material in amount.

Which of the following material events occurring subsequent to the balance sheet date would require an adjustment to the financial statements before they could be issued?

Which of the following is not a procedure that is designed to provide evidence about the existence of loss contingencies?

It would be appropriate for the payroll accounting department to be responsible for which of the following functions?

If management refuses to furnish certain written representations that the auditor believes are essential,which of the following is appropriate?

The review of audit working papers by the audit partner is normally completed:

The auditors used statistical sampling for the audit of inventory and calculated an estimated total audited value of $1,100,000;the client's book value for inventory is $1,200,000.This misstatement is properly classified as a:

Which of the following is not a procedure that auditors typically perform to search for significant events during the period after year-end but prior to the audit report date?

An attorney responding to an auditor as a result of the client's letter of audit inquiry may appropriately limit the response to:

An auditor believes that a client's warranty liability is between $100,000 and $130,000,with each amount in that interval equally likely.The financial statements show a liability of $90,000.

The Role of the Public Accountant in the American Economy

Professional Standards

Professional Ethics

Legal Liability of Cpas

Audit Evidence and Documentation

Audit Planning, understanding the Client, assessing Risks, and Responding

Internal Control

Consideration of Internal Control in an Information Technology Environment

Audit Sampling

Cash and Financial Investments

Accounts Receivable, notes Receivable, and Revenue

Inventories and Cost of Goods Sold

Property,plant,and Equipment: Depreciation and Depletion

Accounts Payable and Other Liabilities

Debt and Equity Capital

Auditors Reports

Integrated Audits of Public Companies

Additional Assurance Services: Historical Financial Information

Additional Assurance Services: Other Information

Internal, operational, and Compliance Auditing

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