Exam 24: Completing the Audit

At the completion of the audit, management is typically asked to make a written statement as a part of the engagement letter that it is aware of no undisclosed contingent liabilities.

Discuss the four principal purposes of the required communication with the audit committee regarding certain additional information obtained during the audit.

Which of the following groups has the responsibility for identifying and deciding the appropriate accounting treatment for recording or disclosing contingent liabilities?

Current professional auditing standards mandate the use of analytical procedures during the testing phase of the audit.

If an auditor discovers that previously issued financial statements are misleading, the most desirable approach to follow is to request that the client issue an immediate revision of the financial statements containing an explanation of the reasons for the revision.

Auditing standards require auditors to evaluate whether there is a substantial doubt about a client's ability to continue as a going concern.One of the most important audit procedures to perform to assess the going concern question is:

What are the three required conditions for a contingent liability to exist?

After the balance sheet date, but prior to the issuance of the audit report, the client suffers an uninsured loss of their inventory as a result of a fire.The amount of the loss is material.The auditor should:

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.

When subsequent events are used to evaluate the amounts included in the year-end financial statements, auditors must distinguish between conditions that existed at the balance sheet date and those that came into being after the balance sheet date.

When should auditors generally assess a client's ability to continue as a going concern?

The auditor's primary concern relative to presentation and disclosure-related objectives is:

Attorneys in recent years have become reluctant to provide certain information to auditors because of their own exposure to legal liability for providing incorrect or confidential information.State the two main reasons that attorneys refuse to provide the auditors with complete information.

An auditor's decision concerning whether or not to dual date an audit report is primarily based on the auditor's decision to:

Which of the following statements is most correct about an auditor's required communication with management and those charged with corporate governance?

An attorney is aware of a violation of a patent agreement that could result in a significant loss to the client if it were known.This is an example of a(n):

What needs to be included in a letter of inquiry sent to a client's legal counsel?

A client has a calendar year-end.Listed below are four events that occurred after December 31.Which one of these subsequent events might result in adjustment of the December 31 financial statements?

Which of the following procedures and methods are important in assessing a company's ability to continue as a going concern?

Which of the following is not one of the categories of items included in the client letter of representation?