Auditors should perform audit procedures relating to subsequent events? Through issuance of the audit report. Through the date of the audit report. Through year end. For a reasonable period after year end.
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In performing your firm's internal inspection, you find that the risk assessment on one of the audits subject to review addresses some, but not all, of the client's specific risks of material misstatement. The audit engagement team May forego taking any action as long as sufficient substantive procedures were performed. May defer taking any action and perform the omitted procedures on the subsequent year's audit May defer taking any action and perform the omitted procedures on the subsequent year's audit, but only if sufficient substantive procedures were performed. Should perform the omitted procedures.
Akash M.
The following are independent situations that have occurred in your public accounting firm, Arthur Hurdman: Case 1: During the internal inspection by a regional office of Arthur Hurdman, one of its clients, Wildcat Oil Suppliers, was selected for review. The reviewers questioned the thoroughness of inventory obsolescence procedures, especially in light of the depressed state of the oil exploration industry at the time. They believed that specific substantive procedures, which they considered appropriate, were not performed by your audit team. Case 2: Top Stove, one of your clients, installed an automated system in July 2017 to process part of its accounting transactions. You completed the audit of Top Stove's December 31, 2017, statements on February 15, 2018. During the April 2018 review work on Top Stove's first quarter financial information, you discovered that during the audit of the 2017 statements, only the manual records had been investigated in the search for unrecorded liabilities. Required: a. Without regard to the specific situation given, answer the following questions: 1. What are the proper steps auditors should take if it is discovered, after the report date, that an important substantive procedure was omitted? 2. How are auditors' decisions affected if, after review of the audit documentation, they determine that other substantive procedures produced the sufficient appropriate audit evidence? 3. If, in subsequently applying the omitted procedure, auditors become aware of material new information that should have been disclosed in the financial statements, how should they proceed? b. Describe the proper action to take in each of the preceding situations, given the following additional information: Case 1: You thoroughly consider the scope of the audit of Wildcat Oil Suppliers and have made a detailed review of the audit documentation. You have concluded that sufficient compensating procedures were conducted to support the valuation of inventory. Case 2: Your subsequent investigation of the information system's records of Top Stove revealed that material liabilities were not recorded as of December 31.
Maurice and Janice are discussing final analytical procedures that are conducted toward the end of an audit. Maurice has recently joined the firm and is working on his first audit. He asks Janice to explain in a little more depth about analytical procedures performed at the end of the audit. Which of the following statements by Janice are accurate? (Select all that apply.) Analytical procedures are used at the end of an audit to help the auditor confirm his or her understanding of the audit findings. The exact analytical procedures performed are determined subjectively by the auditors, based on his or her experience with the industry and the client. The nature, timing, and extent of final analytical procedures are determined jointly during the audit by the auditors and senior management. Analytical procedures are required by generally accepted auditing standards to be conducted at the beginning of the audit only as part of risk assessment.
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Horngren’s Cost Accounting
Cost Accounting A Managerial Emphasis
Principles of Accounting Volume 1: Financial Accounting
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