Topic 13

PCAOB standards require that the auditor compile a completed set of audit documentation within _________ days following the report release date. 60 90 45 30

45 Reason: PCAOB standards allow the auditor 45 days to compile a completed set of audit documentation following the report release date.

ASB and IAASB auditing standards allow the auditor ______ days following the report release date to compile a completed set of audit documentation. 30 45 90 60

60 Reason: ASB and IAASB standards allow the auditor 60 days following the report release date to compile a completed set of audit documentation.

PCAOB standards require that the auditor retain audit documentation for _______ years from the report release date, while ASB and IAASB standards require audit documentation to be retained for _______ years from the report release date.

7, 5 Reason: PCAOB standards require that documentation be retained for 7 years following the report release date, while ASB and IAASB standards require that documentation be retained for 5 years.

Which of the following is NOT a type of audit documentation that auditors should include in their files? -The audit program -The engagement letter -Copies of the client's financial statements -Each of the above is a type of audit documentation that the auditor should include in the file

All the above

Audit documentation should include information regarding who performed the audit work, and it is recommended, but not necessary to indicate the date it was performed or who reviewed the work.

False Reason: It is necessary to document who performed the work, when they performed it, who reviewed the work, and when it was reviewed.

Which of the following methods might the auditor use to document their discussion regarding the susceptibility of the financial statements to material misstatements? Include transcripts from their meeting Write a note in a memo that the discussion occurred and the date it occurred Include a check mark in the audit program next to the step requiring this discussion

Include transcripts from their meeting Reason: Providing the transcript of the meeting is the only method out of these options that provides adequate documentation of this meeting. Indicating that it happened is not enough information.

Each of the following is a potential source of review of audit documentation except: The PCAOB inspection program The AICPA peer review program Concurring partner review Reviews by other clients to decide whether to hire the auditor All of the above are potential sources of review of the audit documentation

Reviews by other clients to decide whether to hire the auditor Reason: Other audit clients do not have access to audit documentation since it contains confidential client information.

When an auditor needs to add documentation following the completion period, he or she must include all of the following except: The date the new material was added The name of the person who prepared the additional documentation The specific reason(s) for adding the documentation The documentation form that the new documentation is replacing Each of the above is required to be included along with the new documentation

The documentation form that the new documentation is replacing Reason: Since documentation cannot be deleted or modified (or replaced) under PCAOB rules, there is no need to document which form the new documentation is replacing.

Auditors should document an understanding of clients internal controls through methods such as flowcharts or narratives.

True

The form of audit documentation depends on the nature of the type of audit test performed.

True

Audit documentation is meant to provide support for conclusions drawn by the auditor, to provide evidence that the audit was performed in compliance with GAAS, and facilitates the planning, performance, and supervision of the engagement as well as the review of the quality of work.

True Reason: Each of these four purposes of audit documentation is listed in Auditing Standard Number 3.

An audit program is a form of audit documentation that provides evidence that the audit was planned and that the necessary audit steps were performed.

True Reason: The audit program indicates the steps to be taken in the audit. As such, it provides evidence that the audit was properly planned and that it was carried out.

'Work papers' is another term used by auditors to describe some types of audit documentation.

True Reason: This statement is true. The term work papers, or working papers is a common term describing some types of the auditor's documentation.

Under PCAOB rules, auditors are not allowed to delete or modify any documentation following the completion of audit documentation. TrueFalse

True Reason: while auditors can add to the documentation following its completion with the appropriate explanation, they cannot modify or delete existing documentation.