Exam 14: Completing a Quality Audit

After completing the audit report of Blair Corporation,but before delivering the audit report to the client,a tornado demolished the main production facility.In this case,what option is available to the auditor other than dual dating the report?

Which one of the following is not an example of an additional procedure that typically relates to the discovery of subsequent events?

Management letters to clients What is a management letter and how does it differ from a management representation letter?

Which of the following statement is false regarding analytical procedures that help auditors assess the overall final presentation of the financial statements?

FASB has set forth four categories of potential losses that can be reasonably estimated.

If an auditor becomes aware of violations of the Foreign Corrupt Practices Act of 1977 (FCPA),the auditor should notify the CFO about the violations,their circumstance,and the effect on the financial statements.

Which of the following is not a potential indicator of going-concern problems for a client?

According to the SEC's Staff Accounting Bulletin 108,what approach is used when assessing uncorrected misstatements?

The primary source of evidence concerning contingencies is the client's external attorney.

Which of the following is not an indicator of a potential going-concern problem?

Which of the following is a category that does not reflect the contingent nature of losses and the guiding criteria organized around probability of outcomes as provided by the FASB?

During the course of an audit,misstatements that are individually immaterial may be detected.What should the auditor do with these?

Which one of the following would the auditor consider to be an indication of a potential going-concern problem?

The partner performing an engagement quality review will review the working papers and financial statements but will not perform which of the following?

When obtaining reasonable assurance that the financial statements are free from material misstatements,auditors should consider the applicable legal and regulatory frameworks that apply to the entity.

Which of the following is the best example of a Type I subsequent event?

CPA is a partner in a medium-sized CPA firm and takes an active part in the conduct of every audit she supervises.She follows the practice of reviewing all audit files of staff auditors on her team as soon as it is convenient,rather than waiting until the end of the audit.When the audit is nearly finished,Thompson reviews the audit files again to make sure that she has not missed anything significant.Because she makes most of the major decisions on the audit,there is rarely anything that requires further investigation.When she completes the review,she prepares a draft of the financial statements,gets them approved by management,and has them assembled in her firm's office.No other partner reviews the audit documentation,because Thompson is responsible for signing the audit reports. REQUIRED: (1)Evaluate the practice of not having a concurring partner review of the audit documentation by another partner in the firm, (2)explain some of the procedures the reviewer should perform as part of the review process,and (3)what documentation should be included.

The auditor should discuss with the audit committee any control deficiencies that were identified and were not remediated prior to year-end.

A management letter is the same as a management representation letter.

When responding to the auditor as a result of the audit client's letter of inquiry,how might the attorney limit the response?