Day 4

Question 1

Which FS’s and accounts that have relationships yield the highest evidence?

Answer 1

Income Statement

Int Exp

Question 2

What does the predecessor auditor do when presenting FS comparative form when PY was audited by another?

Answer 2

1. Read CY stmts
2. Compare CY with PY
3. Obtain Rep. Letter from successor Auditor
4. Obtain Rep. Letter from MGMT
5. Date report as Unrevised = original report date or Revised = dual date

Question 3

Only DORCS change their mind

Answer 3

Date - auditors previous report

Opinion - type previously issued

Reason - for prior opinion

Changes - that have occured

Statement - that the “opinion…is different”

Question 4

Opinion Type: Auditor concludes a material weakness exists as of the date of MGMT’s report

Answer 4

Adverse

Question 5

Related party transactions are found to be materially inconsistent with many MGMT’s explanations - the auditor should do what?

Answer 5

Consider the reliability of MGMT’s other representations/explanations on significant matters