Exam 11: Completing the Audit

Assume that Rory is auditing the financial statements of Augusta,Inc.Rory completes his fieldwork on February 25 and his report (along with Augusta's financial statements)is issued on March 1.On March 3,a hurricane destroys a warehouse that contains a significant amount of uninsured inventory.Which of the following best describes Rory's responsibility with respect to the effects of this hurricane on Augusta's financial statements?

Analytical procedures performed near the end of an audit generally include

Which of the following items would appear in written representations in the audit of a public entity but not a nonpublic entity?

Below is a list of events that occur throughout an audit examination.Indicate,using the correct letter,the time period during which these events are most likely to occur.An event may occur in more than one time period. A.Prior to the date of the financial statements. B.Between the date of the financial statements and the date of the auditors' report. C.Between the date of the auditors' report and the audit report release date. D.After the audit report release date.1___.Subsequently discovered facts.2___.Roll-forward work.3___.Attorney letters.4___.Interim testing relating to substantive procedures.5___.Preparation of proposed adjusting journal entries.6___.Dual dating for subsequently discovered facts.7___.Communications with the individuals charged with governance.8___.Written representations.9___.Identification of subsequent events.10___.Interim testing related to tests of controls.

Which of the following is the most effective method of identifying potential earnings management attempts?

Which of the following conditions or set of circumstances would not ordinarily raise questions about the entity's ability to continue as a going concern:

Explain briefly (a)written representations,(b)internal control communications,and (c)management letters.In your answer,include the general content of the communication,the parties involved with the communication,the required form of the communication,and whether the communication is required under generally accepted auditing standards.

Which of the following is an audit procedure that auditors most likely would perform concerning litigation,claims,and assessments?

Which of the following events occurring after the audit report release date most likely would cause auditors to make further inquiries about the previously-issued financial statements?

Small and Tall,CPAs completed the December 31,2017 audit of Big Company on February 10,2018.After the audit report release date,an outstanding lawsuit against Big Company was settled for materially more than recorded in the December 31,2017 financial statements.The amount recorded in the financial statements represented the best estimate of management and the company's attorneys at the time the audit was completed.Based on this new information,Small and Tall,CPAs should

Auditors conclude that the omission of a substantive procedure considered necessary at the time of the examination may impair their present ability to support the previously-expressed opinion.Auditors need not try to perform the omitted procedure if

What course of action should auditors take if,after evaluating management's plan to mitigate the effect of factors that suggest going-concern uncertainties,they believe that substantial doubt about going concern does not exist?

Which of the following is not a purpose of the review of audit documentation by a supervisor during fieldwork?

Explain briefly auditors' responsibility for subsequently discovered facts existing at the date of the auditors' reports.

Subsequent events occur between the ____ and the____.

To whom should written representations be addressed?

The primary source of information auditors use to obtain information about litigation,claims,and assessments is the

Auditors have a responsibility to evaluate whether financial statements properly reflect all known events through the:

Before the impact of adjusting entries proposed by auditors are included in the client's financial statements,the adjustments must be approved by the

Long and Short,CPAs,were auditing Island Corporation for the year ended December 31,2017.On January 11,2018,a major customer of Island Corporation declared bankruptcy as the result of an uninsured loss due to a major fire in their warehouse on January 8,2018.As a result,a material accounts receivable from the customer was determined to be uncollectible.Long and Short,CPAs,would expect the client to