SB 11.2

When subsequently discovered facts are discovered prior to the audit report release, auditors normally choose to

Blank 1: dual Blank 2: date

Near the end of the audit, recommendations to the client are summarized in a document commonly referred to as the

Blank 1: management Blank 2: letter

The situation where auditors failed to perform necessary audit procedures prior to the audit report release date is referred to as

Blank 1: omitted

Auditor recommendations for adjustments to the financial statements are considered to be to indicate management's responsibility for the financial statements.

Blank 1: proposed

Reading minutes of meetings held after the date of the financial statements and reviewing the entity's latest interim financial statements are two procedures that can be performed specially to identify the existence of material

Blank 1: subsequent

Facts that become known to auditors after the the date of the audit report that may have caused a report revision are known as

Blank 1: subsequently Blank 2: discovered

A proposed adjustment to the financial statements that the client decides not to make is called a(n)

Blank 1: uncorrected Blank 2: misstatement

Subsequent events provide evidence of conditions that ______.

existed at or arose following the date of the financial statements

The persons responsible for overseeing the client's financial reporting process, including the internal control over financial reporting, are called individuals charged with

governance

For public entities, the communication of all significant internal control deficiencies must be made to the client in writing _____

prior to the audit report release date

In most public organizations, the phrase "individuals charged with governance" typically refers to ______.

the audit committee of the board of directors

Audit documentation review ______.

can be a component of staff training and evaluation provides an evaluation of the firm's audit practices allows the firm to adhere to the performance principle

Management letters ______.

can make the client aware of other business services offered are delivered to and discussed with the client

Subsequently discovered facts become known to the auditor after the ______.

date of the auditor's report

Events occurring between the financial statement date and the date of the auditor's report are referred to as

Blank 1: subsequent

Which of the following statements regarding auditor evaluation of the materiality of misstatements are correct?

Auditors may evaluate misstatements using either the rollover or iron curtain method. The rollover method only considers current-period income effects.

True or false: Auditors are expected to design and perform procedures solely for the purpose of identifying conditions that indicate going-concern uncertainties.

False

True or false: Auditors are only required to communicate misstatements detected during the audit to the audit committee if they have a material effect on the financial statements.

False

Auditors are required to communicate ______ to the client's audit committee.

all misstatement detected during the audit

When subsequently discovered facts are discovered prior to the audit report release date ______.

auditors generally dual date the audit report

Responsibility for adjusting the financial statements for auditor proposed adjustments rests with the ______.

client

When subsequently discovered facts that would result in either the revision of the auditor's report or the financial statements are discovered after the audit report release date and individuals are continuing to rely on the statements, the ______ should notify the individuals that the statements should not be relied on.

client

Auditors are required to ______.

consider evidence that provides substantial doubt about the client's ability to continue as a going concern obtain information from management regarding plans to mitigate the effects of going concern uncertainties

When auditors use the ______ method to evaluate the materiality of uncorrected mistakes, the aggregate effect of the misstatements on the entity's balance sheet are considered.

iron curtain

Engagement quality review ______.

is also known as concurring-partner review reviews whether audit evidence was sufficient to support the audit opinion is required by GAAS

Auditor communications to individuals charged with governance include ______.

judgment about the quality of critical accounting policies and estimates any disagreements with management auditors' responsibility under GAAS

For nonpublic entities, the communication of all significant internal control deficiencies must be made to the client in writing ______.

no later than 60 days after the audit report release date

Professional standards procedures specifically performed to identify the existence of material subsequent events include ______.

reading applicable meeting minutes held after the financial statement date obtaining written representations as to the existence of events reviewing interim financial statements

When subsequently discovered facts that would result in either the revision of the auditor's report or the financial statements are discovered after the audit report release date and individuals are continuing to rely on the statements, ______.

revised financial statements should be issued as soon as practicable management must notify appropriate individuals that the financial statements should not be relied on

When omitted procedures are discovered ______.

revised reports may or may not be required

When auditors use the ______ method to evaluate the materiality of uncorrected mistakes, only current-period income effect(s) are considered.

rollover

Auditor communications to individuals charged with governance include ______.

significant difficulties encountered during the audit overview of audit scope and timing representations requested from management

A proposed adjustment to the financial statements that the client decides not to make is called a(n) ______ misstatement.

uncorrected