Module 8 Audit completion and reporting

Question 1

For listed companies what does ISQM (UK) 1 also require?

Answer 1

Requires a separate engagement quality reviewer (EQR)

Question 2

Under ISA (UK) 220, who is responsible for the direction, supervision and review of the audit engagement in compliance with professional standards, regulatory and legal requirements:

Answer 2

The engagement PARTNER

Question 3

ISA (UK) 260 requires auditors to communicate to those charged with governance regarding:

Answer 3

• The auditor’s responsibilities in relation to the financial statement audit
• The planned scope and timing of the audit
• Significant findings from the audit
• Auditor independence (in the case of listed comps)

Question 4

What matter must the auditor always communicate in writing:

Answer 4

Significant deficiencies in internal control

Question 5

What should be included by the auditor in the management letter when identifying internal control weaknesses:

Answer 5

1) A recommendation for management to resolve the issue
2) The implications of the control weakness

Question 6

What does ISA (UK) 506 Subsequent Events require the auditor to do?

Answer 6

To be alert for any events occurring after the year end date

Question 7

What is the procedure of auditors in relation to subsequent events?

Answer 7

• obtaining an understanding of any procedures management has established to identify subsequent events
• enquiring to management and those charged with governance as to whether the subsequent events will have an impact on the FS
• reviewing post year end minutes of all board meetings
• reviewing post year end management accounts
• requesting details of pending litigation from lawyers
• obtain written representations from management

Question 8

What stages of an audit should analytical reviews take place?

Answer 8

At the planning stage and at the overall review stage of the audit

Question 9

What is an uncorrected misstatement?

Answer 9

Are misstatements that the auditor had identified during the audit but have not been corrected

Question 10

At completion the auditor will obtain three written representations:

Answer 10

• that those charged with governance acknowledge their collective responsibilities
• required by other ISAs (UK) and
• to support other audit evidence

Question 11

Do written representations provide sufficient appropriate audit evidence on their own?

Answer 11

NO

• they should be compared with other evidence
• not a substitute for other evidence

Question 12

An item is considered pervasive if the effects of the mater:

Answer 12

• Are not confined to specific elements, accounts or times of financial statements
• Represent a substantial proportion of the financial statements, or
• In relation to disclosures, are fundamental to users understanding of financial statements

Question 13

What are the additional elements that need to be included in the audit reports of listed and public interest entitites?

Answer 13

1) Key audit matters
2) Summary of audit approach
3) Reporting on other legal and regulatory requirements
4) Name of the engagement partner