Question 1

Explain why the global financial crisis has resulted in the number of potential and actual legal liability insurance claims and explain how auditors can deal with the risk of litigation in tough economic times.

Accepted Answer

The answer of Explain why the global financial crisis has...

Question 2

What are examples of matters of governance interest that the auditor may wish to discuss with those charged with governance.

Accepted Answer

The answer of What are examples of matters of governance...

Question 3

Which items are matters of governance interest that an auditor would wish to discuss with those charged with governance?

Accepted Answer

A)  the general approach and overall scope of the audit 
B)  the potential effect on the financial statements of any material risks and exposures 
C)  material uncertainties related to events and conditions that may cast significant doubt on the entity's ability to continue as a going concern 
D)  all of the above

Question 4

Explain the difference between type 1 and type 2 subsequent events and provide examples of each type of event.

Accepted Answer

The answer of Explain the difference between type 1 and...

Question 5

Explain the potential threats to independence relating to audit fees and how an auditor can safeguard against these threats.

Accepted Answer

The answer of Explain the potential threats to independence relating...

Question 6

The going concern assumption means the viability of a business to

Accepted Answer

A)  remain in business for the foreseeable future. 
B)  maintain the current level of sales. 
C)  the viability of the business to operate in its current market. 
D)  none of the above.

Question 7

Those charged with governance are accountable for ensuring that the entity achieves its objectives with regard to which of the following?

Accepted Answer

A)  compliance with applicable laws 
B)  the reliability of financial reporting 
C)  both a and b 
D)  none of the above

Question 8

Generally, the further into the future an event is likely to take place, the greater the
uncertainty surrounding the event.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is a procedure used to identify subsequent events?

Accepted Answer

A)  obtaining evidence from the entity's legal representative concerning litigation and claims 
B)  assessing continued compliance with borrowing limits and loan covenants 
C)  performing analytical procedures up to the date of the audit report 
D)  all of the above

Question 10

A limitation on the scope of the auditor's work could result from an inability to perform
procedures or an imposition by the entity.

Accepted Answer

A) True 
 B)False

Question 11

If it is not possible to obtain sufficient appropriate audit evidence, the auditor should:

Accepted Answer

A)  express an unqualified opinion. 
B)  express a qualified, adverse or disclaimer of opinion. 
C)  report the client to CPA Canada. 
D)  express an unqualified opinion with an emphasis of matter.

Question 12

A public auditor in practice can only perform audits and review and is prohibited from
completing non-assurance engagements such as compilations of financial information and tax
engagements.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is not an example of a type 2 subsequent event?

Accepted Answer

A)  the loss of inventory after year-end 
B)  the issuance of shares 
C)  the bankruptcy of a customer subsequent to year-end 
D)  the purchase of a business

Question 14

Joshua Hanson knew that his clients financial statements were misstated but the misstatement was not pervasive. What kind of audit report was he considering?

Accepted Answer

A)  qualified opinion 
B)  emphasis of matter 
C)  compilation 
D)  none of the above

Question 15

Which of the following factors is not relevant when management is assessing the going concern assumption?

Accepted Answer

A)  whether the auditor specializes in the client's industry 
B)  the time into the future that an event is likely to take place 
C)  the nature and condition of the entity's business 
D)  the size and complexity of the entity

Question 16

An auditor's consideration of the going concern assumption does not include considering

Accepted Answer

A)  knowledge of conditions and events obtained during planning and performing the audit. 
B)  any material uncertainties about the entity's ability to meet obligations as they fall due. 
C)  changes in the industry in which the entity operates which could affect future operations. 
D)  the auditor's final assessment of audit risk.

Question 17

Which of the following is not a step in forming an opinion on the financial statements?

Accepted Answer

A)  evaluation of the audit evidence obtained 
B)  evaluation of the effects of unrecorded misstatements 
C)  evaluating the fair presentation of the financial statements 
D)  none of the above

Question 18

Which of the following are areas normally covered during the wrap-up of an audit engagement?

Accepted Answer

A)  Perform subsequent events procedures. 
B)  Consider the amount used for materiality. 
C)  Reconsider the assessments of internal control at the entity level and the risk of fraud. 
D)  All of the above.

Question 19

Matters of governance interest that the auditor may wish to discuss with those charged with governance include:

Accepted Answer

A)  any practical difficulties encountered in performing the audit. 
B)  the potential effect on the financial statements of any material risks and exposures. 
C)  expected modifications to the audit report. 
D)  all of the above.

Question 20

When Kelly Lake was training her staff about the auditor's responsibility for subsequent events she made the two following statements:
Which of the above statements, if any, is true?

Accepted Answer

A)  (i) only 
B)  (ii) only 
C)  both (i) and (ii) 
D)  neither (i) nor (ii)

Exam 13: Completing and Reporting on the Audit

Explain why the global financial crisis has resulted in the number of potential and actual legal liability insurance claims and explain how auditors can deal with the risk of litigation in tough economic times.

What are examples of matters of governance interest that the auditor may wish to discuss with those charged with governance.

Which items are matters of governance interest that an auditor would wish to discuss with those charged with governance?

Explain the difference between type 1 and type 2 subsequent events and provide examples of each type of event.

Explain the potential threats to independence relating to audit fees and how an auditor can safeguard against these threats.

The going concern assumption means the viability of a business to

Those charged with governance are accountable for ensuring that the entity achieves its objectives with regard to which of the following?

Generally, the further into the future an event is likely to take place, the greater the uncertainty surrounding the event.

Which of the following is a procedure used to identify subsequent events?

A limitation on the scope of the auditor's work could result from an inability to perform procedures or an imposition by the entity.

If it is not possible to obtain sufficient appropriate audit evidence, the auditor should:

A public auditor in practice can only perform audits and review and is prohibited from completing non-assurance engagements such as compilations of financial information and tax engagements.

Which of the following is not an example of a type 2 subsequent event?

Joshua Hanson knew that his clients financial statements were misstated but the misstatement was not pervasive. What kind of audit report was he considering?

Which of the following factors is not relevant when management is assessing the going concern assumption?

An auditor's consideration of the going concern assumption does not include considering

Which of the following is not a step in forming an opinion on the financial statements?

Which of the following are areas normally covered during the wrap-up of an audit engagement?

Matters of governance interest that the auditor may wish to discuss with those charged with governance include:

When Kelly Lake was training her staff about the auditor's responsibility for subsequent events she made the two following statements: Which of the above statements, if any, is true?