Auditing - Chapter 17 Exam Questions with Verified Solutions (Graded A+)
An auditor would be most likely to identify a contingent liability by obtaining a(n): - Answers letter from the entity's general legal counsel.
An auditor should request that an audited entity send a letter of inquiry to tho...
An auditor would be most likely to identify a contingent liability by obtaining a(n): - Answers letter from
the entity's general legal counsel.
An auditor should request that an audited entity send a letter of inquiry to those attorneys who have
been consulted concerning litigation, claims, or assessments. The primary reason for this request is to
provide: - Answers corroboration of the information furnished by management concerning litigation,
claims, and assessments.
An auditor issued an audit report that was dual dated for a subsequent event occurring after the date on
which the auditor has obtained sufficient appropriate audit evidence but before issuance of the financial
statements. The auditor's responsibility for events occurring subsequent to the date on which the
auditor has obtained sufficient appropriate audit evidence was: - Answers limited to the specific event
referenced.
Which of the following procedures would an auditor most likely perform to obtain evidence about the
occurrence of any changes in internal control that might affect financial reporting between the end of
the reporting period and the date of the auditor's report?
- Examine relevant internal audit reports issued during the subsequent period.
- Confirm bank accounts established after year-end.
- Inquire of the entity's legal counsel concerning litigation, claims, and assessments arising after year-
end.
- Review a fire insurance settlement during the subsequent period. - Answers - Examine relevant internal
audit reports issued during the subsequent period.
Final analytical procedures are generally intended to: - Answers provide the auditor with a final, overall
evaluation of the relationships among financial statement balances.
Which of the following audit procedures is most likely to assist an auditor in identifying conditions and
events that may indicate substantial doubt about an entity's ability to continue as a going concern?
- Review management's plans to dispose of assets.
- Consider management's plans to reduce or delay expenditures.
- Review compliance with the terms of debt agreements.
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