Exam 24: Audit Completion

Subsequent events which require adjustment to the financial statements provide additional information about significant conditions/events which did not exist at the balance sheet date.

An auditor performs interim work at various times throughout the year.The auditor's subsequent events work should be extended to the date of:

State the three purposes of the client letter of representation.

Subsequent discoveries of facts requiring the reissuance of financial statements arise from events occurring after the date of the auditor's report.

Define the term contingent liability and discuss the criteria accountants and auditors use to classify these accounting events.

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.

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.

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

Audit procedures related to contingent liabilities are initially focused on:

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

Although the letter of representation is typed on the client's letterhead and signed by the client,it is common for the auditor to prepare the letter.

Which of the following audit procedures would most likely assist an auditor in identifying conditions and events that may indicate there could be substantial doubt about an entity's ability to continue as a going concern?

Many of the audit procedures for finding contingencies are usually performed as an integral part of various segments of the audit rather than as a separate activity near the end of the audit.

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.

State three items that should be included in a standard "inquiry of attorney" letter.

At the completion of the audit,management is asked to make a written statement that it is not aware of any undisclosed contingent liabilities.This statement would appear in the:

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.

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

Auditing standards require that the auditor evaluate whether there is a substantial doubt about a client's ability to continue as a going concern for at least:

While there is no professional requirement to do so on audit engagements,CPAs frequently issue a formal "management" letter to clients.The primary purpose of this letter is to provide: