Exam 18: Advanced Topics Concerning Complex Audit Judgments

The SEC has the authority to issue guidance on sustainability disclosures and in 2010 issued interpretive guidance regarding public companies' disclosure requirements for climate change matters.

Assuming that other assets have been properly valued,if the market value of the reporting unit is equal to the carrying value of the assets of the reporting unit the presumption is that goodwill has been impaired.

Assessing Whether Misstatements Are Material What additional information might the auditor choose to analyze to determine whether or not the financial statements are misstated by a material amount?

While conducting an audit program for goodwill impairment testing,if the original reporting unit no longer exists because operations have been fully integrated into operations of the parent company,the approach would be to determine whether all other assets have been adjusted to fair value,where applicable.

Which method focuses on assuring that the year-end balance sheet is correct and does not consider the impact of prior-year uncorrected misstatements reversing in later years?

Impairment is measured by the difference between market value of the operating segment and which of the following?

Level 1 in the fair value audit consideration indicates which of the following?

Audit Program for Goodwill Impairment Testing Outline the major elements of an audit program to determine whether there is a goodwill impairment,and if there is,the extent of the goodwill impairment?

For the same client,SEC prohibits a CPA firm from providing which of the following services?

Which is the international body that sets standards for the practice of internal auditing across the world?

Volume of transactions affected is one of the critical criteria in assessing materiality of internal control deficiencies.

Auditors should consider only quantitative effects and not qualitative effects in making materiality judgments.

Which of the following has represented the fastest growth area in public accounting practice over the past few years?

Which one of the following factors is not considered when assessing the quality of internal audit?

An auditor's consideration of materiality is a matter of professional judgment and is influenced by the auditor's perception of the needs of users of financial statements.

Which of the following indexes track the financial performance of sustainability-driven companies?

For nonprofit entities,appropriate benchmarks for materiality judgments would include which of the following?

The significant judgments of "Deferred income taxes" are subject to estimates of future profitable operations against which the deferred asset might be utilized.

Critical Criteria in Assessing Severity of Internal Control Deficiencies What general factors should be considered by an auditor in evaluating whether or not a control deficiency is a material weakness,or a significant deficiency,or a control issue?

Auditors need to consider the risk and take appropriate actions relating to material misstatements of fact contained in the client's MD&A section of the 10-K filed with the SEC.