Exam 24: Completing the Audit

After an auditor has issued an audit report on a nonpublic entity, there is no obligation to make any further audit tests or inquiries with respect to the audited financial statements covered by that report unless:

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

If an auditor concludes there are contingent liabilities, then he or she must evaluate the:

With which of the following client personnel would it generally not be appropriate to inquire about commitments or contingent liabilities?

When communicating with the audit committee and management:

Audit procedures related to contingent liabilities are initially focused on:

Results from the final analytical procedures may indicate that additional audit evidence is necessary.

The fieldwork for the December 31, 2013 audit of Treble Corporation ended on March 17, 2014.The financial statements and auditor's report were issued and mailed to stockholders on March 29, 2014.In each of the material situations (1 through 5)below, indicate the appropriate action (a, b, c, d, or e).The possible actions are as follows: a.Adjust the December 31, 2013 financial statements. b.Disclose the information in a footnote in the December 31, 2013 financial statements. c.Request the client revise and reissue the December 31, 2013 financial statements.The revision should involve an adjustment to the December 31, 2013 financial statements. d.Request the client revise and reissue the December 31, 2013 financial statements.The revision should involve the addition of a footnote, but no adjustment, to the December 31, 2013 financial statements. e.No action is required. The situations are as follows: ________ 1.On January 16, 2014 a lawsuit was filed against Treble for a patent infringement action that allegedly took place in early 2010.In the opinion of Treble's attorneys, there is a reasonable (but not probable)danger of a significant loss to Treble. ________ 2.On February 19, 2014, Treble settled a lawsuit out of court that had originated in 2009 and is currently listed as a contingent liability. ________ 3.On March 30, 2014, Treble settled a lawsuit out of court that had originated in 2007 and is currently listed as a contingent liability. ________ 4.On February 2, 2014, you discovered an uninsured lawsuit against Treble that had originated on August 30, 2010. ________ 5.On April 7, 2014, you discovered that a debtor of Treble went bankrupt on January 22, 2014, due to a major uninsured fire that occurred on January 2, 2014.

Auditors often integrate procedures for presentation and disclosure objectives with:

Auditing standards require the auditor's assessment of going-concern issues.

One of the primary approaches in dealing with uncertainties in loss contingencies uses a ________ threshold.

The auditor's responsibility for "reviewing the subsequent events" of a public company that is about to issue new securities is normally limited to the period of time:

A client representation letter is:

Auditors are required to obtain a letter of representation that describes management's planned solutions to all internal control weaknesses identified during an audit.

The date of the management representation letter received from the client should coincide with which of the following?

Which of the following is correct regarding supplementary information?

If an attorney refuses to provide the auditor with information about material existing lawsuits or unasserted claims, current professional standards require that the auditor consider the refusal as a scope limitation.

List four specific matters that should be included in a client representation letter.

The issuance of bonds by the client subsequent to the balance sheet date would require a footnote disclosure in, but no adjustment to, the financial statements under audit.