Exam (elaborations)
Solutions for Audit - Chapter 17 (15th Canadian Edition Arens)
- Course
- Institution
Solutions for Audit - Chapter 17 (15th Canadian Edition Arens)
[Show more]
Content preview
Solutions for Audit - Chapter 17 (15thCanadian Edition Arens)
contingent liability - ANSis a potential future obligation to an outside party for an unknown
amount resulting from activities that have already taken place.
3 conditions required for a contingent liability to exist - ANS1. there is a potential future payment
to an outside party or the impairment of an asset that resulted from an existing condition. 2.
there is uncertainty about the amount of the future payment or impairment. 3. The outcome will
be resolved by some future event or events.
Contingent Liability Classification - ANSthe objective of evaluating the accounting treatment of
known contingent liabilities to determine whether management has properly classified the
contingency.
Contingent Liability Valuation - ANSthe objecting of evaluating the reasonableness of
management's estimate of the contingent liability
Contingent Liability Completeness - ANSthe objective of identifying, to the extent practical, any
contingencies not already identified by management
First step in audit of contingencies - ANSto determine whether any contingencies exist
(occurrence and presentation assertions)
Commitments - ANSclosely related contingent liabilities (agreement to commit the firm to a set
of fixed conditions in the future, regardless of what happens to profits or the economy as a
whole)
Legal inquiry letter - ANSa letter addressed to the client's legal counsel (in-house, and/or
external), asking for known litigation or other claims against the client that is relevant for
financial statement disclosure.
Outstanding claim - ANSexists when a suit has been brought or when the client has been
notified that suit will be brought
Unasserted claim - ANSexists when no suit has been filed but is possible.
Subsequent Events - ANSevents occurring between the date of the financial statements and the
date of the auditor's report
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller QualityPDF. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $11.49. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
75759 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now