Exam 11: Completing the Integrated Audit and Reporting

Triad, Inc. sells body armor to various governments around the world. One of its major customers was a country that was experiencing civil unrest throughout the past year. Triad, Inc. had a very material account receivable from this country's military government at its fiscal year end on December 31. Although it was temporarily kept a secret from the press, the military government was overthrown in the last week of the calendar year and a new democratic government was set up with an interim president. When elections were held in January, one of the decisions made by the voters was to disavow any of the prior government's debts to any entities outside the country. Triad, Inc. management and the audit firm learn about these events from news reports in January while the integrated audit engagement is in process. (a) How should these events affect Triad, Inc.'s financial statements? How should they affect the financial statement audit report? Does this scenario affect the auditor's report on ICFR? (b)Assume that the military government was overthrown in early January and Triad and the auditor learned of it in February, when the audit was still in process.How does your answer change? (c) Assume that the military government was overthrown in March and that Triad and the audit firm saw the news reports shortly after the 10K, including the audit report, was filed with the SEC. How does your answer change?

Which of the following is a subsequent event:

The audit report should include a statement that:

The auditor obtains representations from management and attorneys prior to issuing the audit report.

Section 302 certifications are:

An audit report should be reissued by the predecessor auditor if:

When reviewing subsequent events, the auditor should:

A client acquires a company on January 12, 20X1 while its auditor is preparing the audit report for 20X0. Plans for this acquisition began in late December, 20X0, although the auditor was unaware of them. GAAS requires the auditor to:

The audit opinion on the financial statements and the ICFR must be in the same report.

The final phase of the audit occurs after the report date.

How can the language of an unqualified ICFR audit report be modified and for what reasons?

Describe the different types of ICFR audit reports that can be issued and the circumstances justifying each type of report.

An auditor compiles the financial statements for a nonprofit firm. Per GAAS, the auditor must: