DECK 6 Flashcards
The scope of an audit is not restricted when an attorney’s response to an auditor, as a result of a client’s letter of audit inquiry, limits the response to
A. Matters to which the attorney has given substantive attention in the form of legal representation.
The primary source of information to be reported about litigation, claims, and assessments is the
Client’s management.
The primary reason an auditor requests letters of inquiry be sent to a client’s attorneys is to provide the auditor with
Corroboration of the information furnished by management about litigation, claims, and assessments.
Reviewing confirmations of loans receivable and payable for indications of guarantees WOULD?
be most likely to assist an auditor in identifying related party transactions?
Making a loan without scheduled terms for repayment of the funds.
Which of the following events most likely indicates the existence of related parties?
After identifying related party transactions, an auditor most likely would
Determine whether the transactions were approved by the board of directors or other appropriate officials.
When auditing related party transactions, an auditor places primary emphasis on
THE DISCLOSURE
“The auditor’s report should not be dated earlier than the date on which the auditor has obtained sufficient appropriate audit evidence to support the opinion.
OPINION
procedures would an auditor most likely perform to obtain evidence about the occurrence of subsequent events?
Inquiring of the entity’s legal counsel concerning litigation, claims, and assessments arising after year end.
An auditor issued an audit report that was dual dated for a subsequent event occurring after the audit report date but before release of the auditor’s report.
The auditor’s responsibility for events occurring subsequent to the audit report date was
Limited to the specific event referenced.
Inquiring as to whether anyInvestigate changes in long-term debt occurring after year end.unusual adjustments were made after year end….
procedures an auditor be most likely to perform in obtaining evidence about subsequent events?
Performing tests of control to evaluate the effectiveness of relevant controls is NOT…
a substantive procedure potentially applicable to every balance-sheet element
????? is not an assertion associated with account balances at the end of the period?
Classification
Confirmation procedures applicable to assets (e.g., accounts receivable) fundamentally address which assertion associated with account balances at the end of the period?
existence
Low average balance + high number of deposits=
check Kitting
